# ATR Bands

### Overview

Integrating Bollinger Bands directly to the Average True Range (ATR) indicator creates a powerful hybrid tool. \
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By combining the volatility-based Bollinger Bands, which comprise an upper and lower band around a moving average, with the ATR's representation of market volatility, you can gain a comprehensive view of price movements. \
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This synergistic approach enhances decision-making by pinpointing key entry and exit points based on volatility-adjusted support and resistance levels.

### Interpretation

ATR Bollinger Bands are interpreted as follows:

* When the ATR touches or crosses the upper band, it indicates increased volatility and potential overbought conditions.
* When the ATR touches or crosses the lower band, it indicates decreased volatility and potential oversold conditions.

## Indicator Triggers:

The ATR Bands indicator is integrating the same triggers than our [Bollinger Bands indicators](/indicators/runbot-indicators/bollinger-bands.md), or some of [basic general triggers](/indicators/basic-triggers.md).

## Touch Band

<figure><img src="/files/SsM8JwrtDcvYuZSA7zGH" alt="" width="563"><figcaption><p>A long signal is triggered if price touch down the ATR lower band.</p></figcaption></figure>

<figure><img src="/files/VrOtJfL2yyXy23yytoyP" alt=""><figcaption><p><strong>A long signal is triggered as price touched down the ATR lower band.</strong></p></figcaption></figure>

## Option : Includes price reversal into the candle wick

<figure><img src="/files/OqFaKwxFMNg59OS0UAeD" alt="" width="321"><figcaption><p>Feature available on some bands / line indicators</p></figcaption></figure>

If this option is deactivated, the touch is triggered only if the opening of the candle is in the correct zone (touch up = opening below the trigger price).

With this option activated, even if we start above the trigger price (in the case of a touch up), if during the candle the price dumps below the trigger price and then reverses above, then we trigger at the moment of the internal touch up.

**Note** : for now, whether it's ON or OFF it only triggers once per candle max (duration of the trigger for the rest of the candle).

Example with this option OFF :&#x20;

<figure><img src="/files/xRaE8p1VCJtvq8BKAuZL" alt="" width="365"><figcaption><p>Deactivated feature "Includes price reversal into the candle wick".</p></figcaption></figure>

Example with this option ON :

<figure><img src="/files/u2YqRHYAzPWyEwK4eFqc" alt="" width="363"><figcaption><p>Activated feature "Includes price reversal into the candle wick".</p></figcaption></figure>

## Notes :

* **Using ATR bands to determine flexible Stop Losses levels:** One common use of the ATR is to set stop loss levels that adjust to the market's volatility. A higher ATR indicates increased market volatility, suggesting that a wider stop-loss might be prudent to avoid being prematurely stopped out by normal market fluctuations.
* **Trading Breakouts:** ATR bands can help identify breakout opportunities. A price move that breaks beyond the ATR bands may indicate a strong movement away from the average price, suggesting a potential continuation in that direction. This can be particularly useful in markets where volatility breakout strategies are effective.
* **Extreme Moves:** When the price touches or crosses the ATR bands, it might be at an extreme compared to recent action. If the market typically reverts to mean behavior, these points can signal a potential reversal.

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