ATR Strategy Templates

Strategy Overview

1. ATR Volatility Filter — Enter breakouts only when ATR is low (compression)
2. ATR-Based Stop Placement — Dynamic stops based on current volatility
3. ATR Expansion Entry — Trade when volatility increases from compressed state

---

Strategy 1: ATR Volatility Compression Breakout

Overview

Enter when ATR is below threshold (low volatility) and price breaks a moving average — breakouts from low volatility often produce strong moves.

When This Works Best

• After consolidation periods
• Before earnings/events
• 4H to 1D timeframes

Algorithm Configuration

Setting	Value
Type	BOTH
Position Size	40% of equity (REL)
Order Type	MARKET
Timeout	COOLDOWN_ONLY, 3 bars

Long Entry Conditions

Group	Indicator	Signal	Threshold
Required	ATR	atr_below_threshold	2.0
Required	EMA	price_above_ema	—

Long Exit Conditions

Setting	Value
Required	ATR · atr_above_threshold · 4.0 (volatility expanded)
Stop Loss	2× ATR trailing
Take Profit	3× ATR

Short Entry Conditions

Group	Indicator	Signal	Threshold
Required	ATR	atr_below_threshold	2.0
Required	EMA	price_below_ema	—

Short Exit Conditions

Setting	Value
Required	ATR · atr_above_threshold · 4.0
Stop Loss	2× ATR trailing
Take Profit	3× ATR

Recommended Parameters

Indicator	Parameter	Value	Notes
ATR	Period	14 bars	Volatility smoothing
ATR	Threshold	2.0%	Low-vol cutoff
EMA	Period	20 bars	Direction

---

Strategy 2: ATR Trend + RSI Pullback

Overview

Use ATR as a volatility context, RSI for entry timing in trending markets.

When This Works Best

• Trending markets
• 1H to 4H timeframes

Algorithm Configuration

Setting	Value
Type	BOTH
Position Size	35% of equity (REL)
Order Type	MARKET
Timeout	REGULAR, 2 bars

Long Entry Conditions

Group	Indicator	Signal	Threshold
Required	ATR	atr_above_threshold	1.5
Required	RSI	rsi_below_threshold	35
Required	EMA	price_above_ema	—

Long Exit Conditions

Setting	Value
Required	RSI · rsi_above_threshold · 60
Stop Loss	2× ATR
Take Profit	3× ATR

Short Entry Conditions

Group	Indicator	Signal	Threshold
Required	ATR	atr_above_threshold	1.5
Required	RSI	rsi_above_threshold	65
Required	EMA	price_below_ema	—

Short Exit Conditions

Setting	Value
Required	RSI · rsi_below_threshold · 40
Stop Loss	2× ATR
Take Profit	3× ATR

Recommended Parameters

Indicator	Parameter	Value	Notes
ATR	Period	14	Standard
RSI	Period	14	Standard
EMA	Period	20	Direction

---

Strategy 3: ATR Signal Line Expansion

Overview

Enter when ATR crosses above its signal line — volatility expanding from compressed state.

When This Works Best

• Breakout conditions
• Post-squeeze environments
• 4H to 1D

Algorithm Configuration

Setting	Value
Type	BOTH
Position Size	30% of equity (REL)
Order Type	MARKET
Timeout	COOLDOWN_ONLY, 5 bars

Long Entry Conditions

Group	Indicator	Signal	Threshold
Required	ATR	atr_above_signalLine	—
Required	EMA	price_above_ema	—

Long Exit Conditions

Setting	Value
Required	ATR · atr_below_signalLine
Stop Loss	5% (REL)
Take Profit	10% (REL)

Short Entry Conditions

Group	Indicator	Signal	Threshold
Required	ATR	atr_above_signalLine	—
Required	EMA	price_below_ema	—

Short Exit Conditions

Setting	Value
Required	ATR · atr_below_signalLine
Stop Loss	5% (REL)
Take Profit	10% (REL)

Recommended Parameters

Indicator	Parameter	Value	Notes
ATR	Period	14	Volatility
ATR	Signal Line	9	Smoothing
EMA	Period	20	Direction

---

Backtesting Recommendations

• Test ATR threshold levels: Determine typical ATR% for your asset
• Compare ATR-based vs fixed stops: Measure improvement from dynamic stops
• Test volatility compression entries: Verify that low-ATR breakouts produce stronger moves

---

Note

Pro Tip: When building strategies in Reversion, put your primary signal in the Required group and confirmation signals in Optional. This ensures the core signal must always be present while allowing flexibility in confirmation. Always backtest parameters per asset — crypto often benefits from adjusted settings due to higher volatility.