Investing & Trading

ATR High SMA Breakouts LE Strategy

By Samantha Baltodano


TL;DR:

The ATR High SMA Breakouts LE strategy is a stock trading strategy developed by Ken Calhoun. This long entry strategy uses the Average True Range (ATR) and a simple moving average (SMA) of the close price to identify high-volatility price breakouts. 


The primary triggering condition for the long entry signal is ATR being at its 14-day highest and price being above its 100-day SMA. There are also two extra conditions that can be applied to refine the signals: a wide-range candle and volume increase. 


It's important to note that this is a long entry strategy only, and other strategies will need to be used for exits. This strategy can be a useful tool for identifying potential investment opportunities in the stock market.


Test The ATR High SMA Breakouts LE Strategy

Great news! 


You can back test this exact strategy on historical data for any of your favorite symbols using TradingView. 


This strategy has already been built and all you have to do is log in and take it for a spin. You can access this indicator here.


If you’re new to back testing and to TradingView, don’t worry. I created a step-by-step guide you can follow to begin testing the ATR High SMA Breakouts LE Study.



What Is The ATR High SMA Breakouts LE Strategy?

If you're interested in trading stocks, you may have heard of the ATR High SMA Breakouts LE strategy developed by Ken Calhoun. 


This long entry strategy is designed to help you identify stocks that have high potential for growth.


To use this strategy, you first need to use the ATR High SMA Breakouts Filter study to find stocks that meet certain price range and volume criteria. Once you have found potential investment opportunities, you can then apply the ATR High SMA Breakouts LE strategy.


The ATR High SMA Breakouts LE strategy uses two popular technical indicators, the Average True Range (ATR) and a simple moving average (SMA) of the close price, to identify high-volatility price breakouts. The ATR is used to measure daily high-low ranges, and a buy signal is confirmed by a moving average crossover.


The primary triggering condition for the long entry signal is ATR being at its 14-day highest and price being above its 100-day SMA. If this condition is fulfilled, the strategy records the high price and adds a simulated long entry order as soon as price exceeds this value by a certain amount.


There are also two extra conditions that can be applied to refine the signals: a wide-range candle and volume increase. 


  • Applying a wide-range candle filter will have the strategy add a simulated order only if the height of the candle at which the primary condition has triggered is at least 1.5 times greater than the average. 
  • Applying a volume filter will check if the volume has increased since the last candle.


It's important to note that the ATR High SMA Breakouts LE strategy is a long entry strategy only, so you will need to use other strategies for exits, such as Trailing Stop LX.


Overall, the ATR High SMA Breakouts LE strategy can be a useful tool for identifying potential investment opportunities in the stock market. With careful research and analysis, you can use this strategy to make informed investment decisions and grow your portfolio over time.



Summary

  • The ATR High SMA Breakouts LE strategy is a long entry strategy designed to help identify stocks with high growth potential.
  • The strategy uses the Average True Range (ATR) and a simple moving average (SMA) of the close price to identify high-volatility price breakouts.
  • The primary triggering condition for the long entry signal is ATR being at its 14-day highest and price being above its 100-day SMA.
  • If the condition is met, the strategy records the high price and adds a simulated long entry order as soon as price exceeds this value by a certain amount.
  • Two extra conditions that can be applied to refine the signals are the wide-range candle and volume increase filters.
  • The strategy is a long entry strategy only, so other strategies, such as Trailing Stop LX, will be needed for exits.


ATR High SMA Breakouts LE is just one of many strategies that Archaide automates. For a full list of strategies and studies available click here.


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