The market makers have a limited amount of money too. They cannot go on forever dropping or raising the price. The ATR Profiler projects a channel like range which bases on price velocity. On every candle we readjust the next candles range. If the range we recalculate based on velocity, is for any reason broken by the market we know for sure there is a market maker presence in the market.
Knowing that market makers are active in an area is just one part of the puzzle. You must also know what they are doing. But thats not something the ATR Profiler can help you with. This tool is 100% unopininated and the trader needs to figure out why price is being pumped 2 or 3x the normal velocity it should.
However, It can always be two things.
- They are inducing traders (The point of maximum greed in the market)
Creating the point where most traders are trapped. The worst place to enter into the trend. The dumb money in other words.
- They are shifting away from a trap that was set previousely
Sometimes they have to move in a certain speed to get away from an area to not let the contracts be closed out by the traders. These moves often creates imbalances in price and they will return back to the areas to balance their books after they have booked a profit on the initially trapped traders.
The range that is based on market velocity that we plot using the ATR Profiler can be used to safely trail your stoplosses. For an example if you were a Seller at the high of the day in the above chart you were able to safely trail the price for sometime. As price respected it until the NY Session opened and the dealers started some action.
If you look at the same chart on the day break line we can also see that there is a detected 2 candles at the very beggining. However this is where the volume initially entered after a dead gap where no one was in charge of basically anything and that too is detected but it may not mean much.
This indicator is Free for you to experiment. You can get the free license to check it out and get the full license if you see profitability to automate it as an Expert Advisor. You can hire me or any developer and I will give my full support in either case. Wish you the Best!
Free copy of ATR Profiler for Metatrader 4 / 5. MT5 Version coming soon.