فوركس ساتو

forex sato
According to my definition (in context of how I like to consider TR) you
simply take the high of the candle and subtract the low of the candle to find
the TR.
After I explain how to read the TR on your charts I’ll tell you how to check to
see which definition your charts use, and what to do if your charts happen to
use the “Encyclopedia” method.
We won’t be using the ATR indicator as Mr. Wilder has intended it to be used
(he developed ATR to accurately reflect the volatility associated with
commodities and to account for the gaps, limit moves and small ranges). We
are really just interested in the True Range (TR) and don’t pay much attention
at all to the “Average” (though I’ll show you a useful thing you can do by
finding the Average).
To find the True Range simply call up a daily chart of whatever currency pair
you want. We’ll discuss other timeframes (i.e. weekly & monthly) later, but
let’s first discuss how to find the TR and why we use it.
You should find the “ATR” option in the menu of available
indicators. Simply select the ATR option and set the period for one (1). A
separate chart should now appear (usually on the bottom of your main chart)
showing a line that bounces up & down. You should see something like this:

The chart above shows about 8 months of EUR/USD daily candles. When
you do this you should select to view the past ten (10) years worth of data to
see the maximum amount of information, but the above chart was zoomed in
so that you can more clearly see it here. Fortunately for me the charts I
currently like to use (Intellichart from Fxtrek.com) display the ATR using the
description I prefer rather than the “Encyclopedia method”.
The ATR (1 period) chart shows you visually the height of each candle (the
high price minus the low price). What the above chart shows you (during the
period of time seen) that is of most interest is what are the largest moves; see
the peaks along the top? The tallest peak visible above (near the left side of
the chart) shows that the biggest move in a single day was 245 pips (to find
out exactly how many pips it was simply mouse over the big candle there to
see it’s specific details). You also want to look at the other peaks to get a
sense of roughly what the largest pip moves that have happened in a single
day. Looking at the above you figure out that roughly 200 pips is the usual
maximum. Hmmm… that’ll be a good term for this, so we’ll from now on in

call it the “UdM” (I just made up this term). The “U” stands for “Usual”, the
“M” stands for “Maximum”. The small case “d” stands for “daily”, and later
“UwM” will be for “weekly” and “UmM” will be for “Monthly”. These terms
will come in handy later when I start explaining how to use them for trading
purposes (later in this book). Back on topic now. So from looking at the
above chart we have decided that the UdM for EUR/USD based on the past
year is roughly 200. “200” is a rough guesstimate, but if you really want to
get an accurate number then feel free to add up the top ten peaks then divide
by 10 to get the average… but honestly I’m often too lazy to do this, so I just
wing it.
Also on the above chart you can see what were the smallest daily moves (on
the above chart 37 pips was the smallest day), but for the most part this is
useless information (except you’ll be interested in knowing what the small
end of the spectrum is for the “Teeny Netless Candles” taught later in this
eBook).
Now notice that we found the UdM to be roughly 200 pips by looking at the
past year. For most purposes, just looking at the past year is sufficient to find
the UdM for any currency pair of interest to you. Now if you were to look
over the past 10 years you would notice that there are more peaks that are
higher (the tallest one I’ve found on EUR/USD is 454 pips – obviously due to
some FA or big news) and by looking at this bigger picture it would appear
that the usual maximum would be around 240ish. Bottom line is that this isn’t
an exact number you are going for, but rather just an approximation of what
the average big days are. For our purposes we’ll consider EUR/USD to have
a UdM of 200 pips. It is important to remember that 200 isn’t a fixed ceiling
of the maximum EUR/USD can move in a day, since there have been days
that were bigger and surely there will be bigger days also in the future, but for
usual 200 can be considered a ceiling for how we plan to use it.
Now you want to figure out what the Average daily Range is (we’ll abbreviate
it as “AdR”). This is quite simple to do by setting your ATR at 240 (roughly
how many days there are in a year). Below is the ATR set at 240 for
EUR/USD since the year 2000.

This calculates for you the Average daily Range (AdR). As you can see, at
the time of writing this, the AdR is 112 pips. This means that the average
difference between the daily high & the daily low is currently 112 pips for
EUR/USD. Remember, this is just an average – some days will move less and
some days will move more.
Here is an interesting aside: Often you hear references that the market moves
about X pips a day. Well now you know how to find out precisely how much
for any currency pair of interest to you.
WEEKLY & MONTHLY
Now that you know how to find the UdM and the AdR you’ll need to find the
same information for weekly (UwM & AwR) and monthly (UmM & AmR)
periods.
To find the Usual weekly Maximum simply call up the weekly chart over the
past 5 years of the currency pair of interest (simply get the 10 year chart and
zoom up). For this example we’ll continue looking at EUR/USD.
Set up an ATR to show one period and a second ATR to show 104 periods
(two years average). Your chart should look something like this
forex sato