A perfect trading entry is every trader’s goal. Whether you’re trading crypto, forex, or commodities, using ATR (Average True Range) correctly can help you achieve consistent and precise entries. In this guide, you’ll learn how to use a simple 5-step method to trade effectively using ATR on 5 or 15-minute timeframes.
Step 1: Set ATR Length to 24 & Measure ATR Value
Open your trading platform and add the ATR indicator to your chart. Go to its settings and set the length to 24.
- Now, mark the high and low of the ATR indicator line, not the price chart.
- Measure the distance from high to low of the ATR line.
- Find the midpoint between the high and low and mark it.
- On the right side, you’ll see the ATR value — this is your benchmark for the day.
- Note this ATR value. You’ll use it tomorrow to gauge whether the market has already made a full move or not.
Step 2: Use ATR Value to Measure Daily Movement
The next day, mark the high and low of the price movement. If the price has already moved close to or more than the ATR value from the previous day:
- If market already moved full ATR — look for reversal or sell trades.
- If only partial movement — look for breakout or buy trades.
This ensures you’re not trading after the market has exhausted its average range.
Step 3: Identify Trade Type
Based on how much of the ATR has been used:
- Less than 50% of ATR used → look for breakout or trend trades.
- More than 80% of ATR used → shift focus to reversal or trap trades.
Match your strategy accordingly — breakout, reversal, trap, or retest.
Step 4: Define Your Bias
Define whether you’re bullish or bearish based on:
- ATR exhaustion
- Market range position (top/bottom)
- Candle structure and momentum
No more guessing. Define your bias before entering.
Step 5: Confirmation + Risk Calculation
Use these methods for confirmation:
- FVG (Fair Value Gap) – Watch for price tapping into FVG zones
- Chart Patterns – Flags, wedges, double tops/bottoms
- Risk Reward – Only enter if minimum RR is 1:2
Use this free Lot Size Calculator to calculate position size correctly before entering any trade.
Pro Tip: Choose a fixed time like 10:00 AM or 7:00 PM and stick to it every day. Being consistent with your trade timing improves discipline and decision-making.
Bonus: Watch This Video Guide
Trade Setup Resources
- Learn More About Chart Patterns
- Open a Crypto/Forex Account with Exness
Final Tips
- Don’t enter without calculating risk/reward
- Never trade after full ATR exhaustion unless for reversal
- Use 5 or 15-minute timeframes for precise entries