#ATR #BTC

The market has fluctuated greatly in recent days. Although we tried to place long orders at 39000 and 40000, we still hit the stop loss several times due to shock. This involves a volatility issue. How to avoid being easily stopped during the fluctuation?

The ATR indicator that I told you two days ago will come into play. I personally feel that this is very useful.

The calculation of ATR is usually based on the highest price, lowest price and closing price. It takes into account the price range for each trading period and then calculates the average to arrive at the average true volatility. This value reflects the volatility level of asset prices over a period of time and can be used to measure market uncertainty and risk.

Simply put, ATR is the average volatility of the last 14 trading cycles. In the market, if the recent volatility is large, then we must adapt to the volatility by increasing the stop loss range and reducing the position.

Assume that the average daily fluctuation of the market is more than 1000U. When we trade, the stop loss is set to 500U. Then the market will be frequently stopped by fluctuations before the market moves.

A reasonable stop loss position should be about 2 volatility. If the price moves in the opposite direction by more than 2 volatility, it means that the direction is moving in the opposite direction to what we expected, that is, a reasonable stop loss.

General trading tools have this tool, you can actually experience it, and you no longer have to worry about being stopped by shocks $BTC