Falling ATR Pointing to Range Bound EURUSD
A steadily falling ATR — Average True Range — is telling us that the price range for EURUSD, and all the other tradeable currency pairs, is shrinking. With price very close to the 50% retracement of the 2008 sell-off accompanied by shrinking volatility which the ATR reflects, I’m reminded of W.D. Gann’s theory that price will spend a high percentage of time between the .375 and .625 levels. This price band is an area which prominent Gann student T. Henning Murray refers to as “the pipe”. With the Euro currently already in “the pipe”, and most traders understanding that markets indeed spend more time tracking sideways rather than trending north and south, we could be in for more counter-trending markets going forward.
Jay Norris
www.trading-u.com
jnorris@brewerinvestmentgroup.com
DISCLAIMER: Futures, options and Forex (off-exchange foreign currency futures and options, or “FX”) trading involves substantial risk of loss and is not suitable for every investor. The valuation of futures, options and Forex may fluctuate, and, as a result, clients may lose more than their original investment.
It is wonderful to see the ATR study used with with meaning and sense. ie. Volatility. It is one thing to know a study, but to know it well and get acquainted with it is better and will give u the edge.
And, I certainly will be aware of the “pipe” in the future..!!
Educating yourself in trading is certainly no bad thing at all. It’s enjoyable too; and with these on-line Blog’s from Jay the world is becoming a brighter place for traders who really wish and earnestly seek little gems to become a better trader! Excellent
(Ascot, UK)