ATR Based SMA Indicator

Creator: Definedge

• Default ATR period: 14
• Default SMA period: 10

As can be seen on the chart, the ATR Based SMA indicator consists of three lines.

1. Green line is the Upper Band
2. Blue line is the Middle Band
3. Red line is the Lower Band

The ATR-based SMA indicator is a combination of ATR and SMA. The middle band (blue line) is the Simple Moving Average line. For the average line, the default period is 10. The upper band (green) and lower band (red) lines represent the standard deviation from the moving average of the ATR value.

ATR-based SMA is commonly used to set stop losses and targets. As an example, if the 10-period SMA value is 100 and the 14-period ATR value is 25, then the Middle band will be plotted at 100, the Upper band will be plotted at 125 (100+25), and the Lower band will be plotted at 75 (100-25).

The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.

This indicator is available in the System Builder on RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.

The indicator is applicable to all types of charting. It is calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin-Ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.