The ATR Forex signals indicator is a powerful trend tool that works for all kinds of currency traders.
It works for scalping, day trading, and swing trading.
Its signals are based on the Average True Range (ATR) technical indicator.
They appear in the form of a histogram below the main Metatrader 4 trade window.
Interpret the ATR buy/sell histogram signals as follows:
- A blue histogram ATR bar represents a bullish trend.
- A red histogram ATR bar represents a bearish trend.
It’s recommended to go long at the first blue bar and short at the first red bar.
The default indicator settings work well for any trade style.
Use on its own or combine with an oscillator or price action.
Feel free to experiment with the different indicator’s inputs settings to suit your needs and preferences.
Free Download
Download the “iATR_Advanced_Histo_v1.0.ex4” MT4 indicator
Indicator Chart (EUR/USD H4)
The EUR/USD 4-Hour chart below displays the Powerful ATR Buy/Sell Metatrader 4 Forex Signals indicator in action.
Basic Trading Signals
Signals from the ATR Buy/Sell Forex Signals MT4 indicator are easy to interpret and go as follows:
Buy Signal: Open a buy trade when the ATR indicator histogram bars change color from red to blue. The ATR trend is now bullish.
Place a stop loss below support or use your own preferred SL method.
Take profit at an opposite sell signal or at a fixed profit target.
Sell Signal: Open a sell trade when the super ATR indicator histogram bars change color from blue to red. The ATR trend now turned bearish.
Place a stop loss above resistance or use your own preferred SL method.
Take profit at an opposite buy signal or at a fixed profit target.
Powerful ATR + Trend Predictor MT4 Day-Trading Strategy
This MT4 strategy uses the trend strength from the Powerful ATR Buy/Sell Forex Signal indicator together with precise entry arrows from the Trend Predictor v1.0.
The ATR-based histogram gives you a sense of the current volatility-based trend: blue for bullish conditions, red for bearish conditions.
The Trend Predictor overlays clearer entry arrows: blue for buy, red for sell. By combining them, you only enter trades when both the trend strength and entry direction agree.
This approach is ideal for day traders who want to capture intraday swings but avoid purely noise-driven entries.
It is most effective on M15 and H1 charts, where there is enough room for ATR-driven moves, but you remain responsive to intraday momentum.
This strategy works particularly well in active sessions (such as London or New York), when volatility is high enough to make ATR reliable.
Buy Entry Rules
- The ATR histogram must turn blue, indicating a bullish trend.
- The Trend Predictor must display a blue arrow, signaling a buy entry.
- Enter a long position when both conditions appear on the same or very close candles.
- Set a stop loss below the most recent swing low or a reasonable ATR-based buffer (for example, 1–1.5 × the current ATR).
- Set your take profit around 1.2–1.8 × your stop distance, depending on how strong the ATR reading is and how much momentum you see developing.
Sell Entry Rules
- The ATR histogram must turn red, indicating a bearish trend.
- The Trend Predictor must show a red arrow, signaling a sell entry.
- Enter a short position when both conditions line up.
- Place your stop loss above the recent swing high or use an ATR-based buffer (e.g., 1–1.5 × ATR).
- Set take profit at around 1.2–1.8 × the stop loss distance, adjusted by volatility.
Advantages
- The ATR histogram gives a volatility-adjusted trend filter, helping you avoid weak trend trades.
- The Trend Predictor arrow provides clear, timely entry signals.
- You only take trades when both trend strength and entry alignment agree, reducing false entries.
- Suitable for intraday trading with meaningful room for profit without holding overnight.
- Allows flexible stop-loss sizing based on ATR, making risk management more adaptive.
Drawbacks
- On very low volatility days, ATR may be too flat, reducing signal generation.
- During sudden spikes (news), arrows may lag or the trend may shift rapidly.
- Stop losses based on ATR can be relatively wide, which may eat into small day-trade gains if not managed carefully.
- Not ideal for traders who prefer very tight scalping targets; this is more swing-within-day oriented.
Example Case Study 1: EUR/USD on M15
During the London session, EUR/USD began to build a steady up move.
The ATR histogram turned blue, indicating growing volatility in the bullish direction.
At the same time, the Trend Predictor formed a blue arrow. A buy entry was taken.
The stop loss was placed just under the recent swing low, but with a little space to account for ATR-based volatility.
Price drifted upward with momentum and hit the take-profit target at roughly 1.5 × the stop loss after a couple of strong bars.
Example Case Study 2: USD/JPY on H1
Later in the New York session, USD/JPY reversed downward.
The ATR histogram switched to red, signifying a shift in volatility toward sellers.
The Trend Predictor then printed a red arrow, confirming a bearish entry.
A short trade was opened, stop loss above a recent swing high using an ATR buffer, and take profit set to about 1.5 times that distance.
Over the next few hours, the pair moved down steadily, and the TP was hit before the price consolidated again.
Strategy Tips
- Use major, liquid pairs like EUR/USD, USD/JPY, or GBP/USD to ensure ATR is meaningful.
- Avoid taking signals right before major economic news that may disrupt ATR-based volatility readings.
- Backtest different ATR multipliers for stop-loss and take-profit to find what works best for your risk tolerance.
- If the ATR histogram turns color but the arrow does not appear, wait patiently — do not force a trade.
- Consider using trailing stop logic once the trade moves in your favor, especially when ATR remains large.
- Track your trades and refine the strategy over time, adjusting TP/SL ratios based on average ATR sizes for your chosen pairs.
Download Now
Download the “iATR_Advanced_Histo_v1.0.ex4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart window indicator
Customization options: Variable (period indicator, bars for average, percentage level up, percentage level down) Width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, Daily, Weekly, Monthly
Type: ATR
