How Determine Stock Trading Range (not ATR)

[RealEstateDayTrader 9]

Howdy fellow BBT Family,

I am not sure of the tech term for this but I want to see if there is a metric for each stock's trading range (again not sure what to call this).  Not the ATR for the day, month or year but minute to minute.

I'd like to get this to know how much I should move out my stop typically on a trade. For example, NVDA or TSLA will move it seems up and down $1 min by minute. 

Thanks for help

MRod

[Angela Kuzeva 23]

Actually, the ATR gives you exactly this information. It measures the current volatility of the stock.  If you put the ATR study on 1 min chart will give you the average range for a 1 min candle, on 5 min TF will be the range of the 5 min candle and so on. The daily ATR gives you the information of the average daily range of the stock. For example, if the stock made 100% of its daily ATR it is not wise to go long but start looking for a reversal.

ATR doesn't stay permanent, when the stock is in play and makes bigger moves, it is reflected in the ATR so your SL changes. 

Another way to use ATR for SL is by time of the day, for example beginning of the session is volatile your SL can be 10% of the daily ATR, later on the day when the volatility goes down you can have tighter SL. You also must consider the spread in you SL calculations. 

Parabolic SAR is another study which you can use as a trailing stop. You can use it for SL, but this will be a wide SL if this is your style. The problem with most indicators is that they work in certain markets and don't work in others. Parabolic SAR is great in trending markets and not in choppy markets. 

 

[RealEstateDayTrader 9]

Thanks for the response @Angela Kuzeva

Follow up question. On this 2 minute chart do I change the value in the study to ?

I'm probably missing something - thanks for your mentorship.

[Angela Kuzeva 23]

I use the default study and shows the ATR (average) for the last 14 days on daily, on 2 min chart will be the last 14 candles. On daily when the ATR is pointing up means stock is trending, expanding the range. When flat, not much activity so I am not expecting outsized days.

If you want to see the ATR of the previous candle you can change it to 1 in the study and it will show you the value in $ for only this candle. If you want to include last 30 candles for example, you change it to 30 in the study. The shorter you make it, the more difficult to read it as gives lots of signals.

You can also see the spikes in the ATR line on the shorter TF if you plot it on you chart (the volume section), which you will read as increased volatility and you anticipate breakout or near reversal point based on the price action, volume candles, where is the stock on the longer TF. I don't use it this way, but it is another way to look at ATR and use it in your analysis. 

The easiest way is to use the daily ATR and % of the daily ATR for a SL. In some stocks like $TSLA your SL could be 1$ and in not so volatile stocks could be 0.05$. It always reflects the volatility in the stock, if trending ATR will be increasing so is your SL. That's particularly useful at the open not to be stopped out all the time and later in the session to capitalize on tighter stops and better R: R.  I also keep wider stops for wicky stocks like $ABNB, $COIN for example. 

[RealEstateDayTrader 9]

Thanks for sharing your knowledge!!