ATR Worm Entry Signals and Peak-to-Trough Distance Filters

Summary

The ATR Worm indicator is presented as a visual aid for scalping entries under two setups: confirmation of a price pattern by the next candle, or a horizontal breakout. Blue dots mark the pattern-validation scenario and red dots mark the breakout scenario, with separate signals for upward and downward trades. Dotted lines show whether the distance from a proposed entry to nearby highs or lows meets a minimum risk-to-reward condition.

The calculations use the current or previous candle’s low for upward levels and high for downward levels, adjusted by half a pip and either one or two times a 14-period ATR. This gives traders a volatility-scaled way to screen for space before taking an entry. The author does not specify the underlying pattern rules, how the horizontal breakout is identified, or how stops and targets are managed. No performance evidence is provided, and the indicator is described as a supplement to the author’s separate scalping strategies.

Key ideas

• The indicator distinguishes pattern-confirmation entries from horizontal-breakout entries using separate visual markers.
• Blue markers represent pattern validation, while red markers represent breakouts.
• The plotted distance levels use current or prior candle extremes with half a pip and one or two times ATR adjustments.
• Trades are filtered when the available distance to nearby highs or lows fails the stated minimum risk-to-reward condition.
• The document gives no backtest results or complete rules for identifying setups and managing positions.

Tags

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