ATR Support and Resistance Bands Around a Daily Pivot

Summary

This indicator method defines a balance point from the prior day’s high, low, and close, then places support and resistance bands at one and two average true ranges around that point. The author describes the inner bands as possible retracement areas and the outer bands as levels price may be less likely to cross. The levels are proposed for intraday targets, stops, and occasional entries, and are presented as a personal preference over conventional pivot levels.

The supplied formula uses a 20-period ATR applied to the balance point and returns the pivot plus four bands. The document offers no backtest, sample, or quantified evidence for its claims about price behavior or comparative reliability. It does not specify instrument, timeframe, volatility regime, or rules for confirming entries and exits, so the suggested interpretation should be treated as a heuristic rather than a validated trading system.

Key ideas

• The balance point is calculated from the prior day’s high, low, and close.
• Bands are placed one and two ATR distances above and below the balance point.
• The author suggests inner bands as retracement areas and outer bands as less likely to break.
• The levels are suggested for intraday targets, stops, and sometimes entries.
• No empirical test or detailed trading rules are provided to validate the interpretation.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.