ATR Forex Tool-Forex Automated Software For Hands-Free Trading
The forex world can sound like unpredictable like a game of french roulette to many, but Forex too is quite an organized and calculative market. Trading is very essential in improving the economic status of any developing country. With the Forex Trading system, it is helpful for newbie traders to learn and improve over the night. This is a very simple system which helps you to look at the market’s action and its potential targets. Professional and commercial traders have actually developed this technique where the principles are helpful for reporting the market’s action from time to time. For getting money in a consistent manner, you must rely on this forex trading system. However, many professional and experienced traders also rely on this to get consistent money. The system alerts the users about the market’s action with respect to price along with risks that are associated. The system also provides options for controlling risks. Currency price fluctuations always happen due to the world’s political events, monetary policies, the status of the economy in the country and various other external forces.
The world is getting technical day by day and this speed has been boosted tremendously with the investment of computers. When we talk about computers, then we surely can not miss the software part of it. The software has made life really easy and fast and the things that used to take lots of time can now be done within no time with the help of effective software. Forex too has not left untouched with them and automated software is widely used in Forex trading since its beginning. With more and more software popping up every day in Forex it is quite hard to determine the right one for us and therefore one should spend some time testing them before selecting them for use.
Average True Range Tool (ATR)
Average True Range (ATR) is an advantageous tool to know about price volatility. Used by Forex traders, it is based on the price movement many find difficulty in knowing about a comparative view in currency pairs. Further many agree that ATR does not indicate when to sell and when to buy. But ATR continues to be a very useful tool in spite of all these critical views and opinions.
Developed by J Welles Wilder, ATR is recommended to be used along with another common indicator that can produce a more crystal clear clarity about currencies and currency pairs. Testing the market volatility is quite simple with the use of ATR and one must know how to use it and when it uses it to get to the accurate picture view of the Forex market. Stating in a concrete way, ATR correctly measures the price range in a way that the higher volatility will indicate higher ATR and vice-versa.
The most common practice of ATR measurement is to choose the highest of 3 metrics such as the current high less the low; the value of the current high less the previous close; the value of the current low less the previous close. By taking the highest of these three metrics, it will indicate the average of the security and then it is trailed after a period of 14 days. This is quite important in order to make trading safe and risk-free.
It is true that the market is subject to a lot of volatility, but ATR lets you know the trading signal that allows you to make accurate decisions. Both the drop or rise is clearly indicated in the average and you could either wait or make a better decision to hold the investments. Fast ATR could be a 14 period, whereas a slow ATR could be a 100 period. The direction in which, the market moves are never predicted, but it does definitely indicate a signal of direction and move when you have ATR.
Checking pips and knowing about the average range of a particular security will help in making profits. If you have a 14-day ATR for a currency pair of GBPUSD you can put a target of 40-50 pips and wait for a profitable trade. So it works as a filter period as you wait for an appropriate indicator to make the next step to move in Forex trade and this will be very safe.
How can automated Software help you?
Forex software is after all software and therefore, it has all the features of standard software and it would be able to help you in the same way as any software does. The best use of automated trading comes with analysis. Such software is able to get all the data in their feed, get it well analysis with the help of the algorithm on which they work and can thus help you in finding out relevant information reading trading.
We can take a simple example. If you are planning to do a trade then you might need to analyze various aspects of it like for instance, you would like to know the currencies status, the pairs that are going along well at present, etc. you would also like to know a bit about how they have fetched recently and how is their standing in the market overall. All this information can help you in finalizing your decision. The software can help you in such kind of analysis.
Automated trading software can go further and can do all the trading by itself. This, however, is not recommended because at the end of the day you have to be present somewhere in the trade. If you are just not using your own discretion, then it would be unwise to expect an automated trading system to do this for you and that to successfully!
So to sum it up, the automated trading system can be used for accurate analysis and you can also use them for getting relevant precision of market trends every now and then. But do not make trading 100% depending on them. That is not advised nor is it rational to make such a move!