This Indicator Predicts How Far a Stock Can Move 📏📊 #Trading #Investing #Strategy

Why It Matters

Combining ATR and ADR provides a quantitative framework to spot volatility squeezes and set realistic price targets, enhancing breakout trading and risk control.

Key Takeaways

• ATR shrinkage signals low volatility and potential breakout
• Compare 14‑day and 9‑day daily ranges for price targets
• Align pivot points with ATR to identify support and resistance
• Use $5‑$5.50 range to estimate probable low after high
• ATR around $7 helps set one‑ATR distance for trade planning

Summary

The video explains how the Average True Range (ATR) and the Average Daily Range (ADR) can serve as a probabilistic ruler for traders, helping to gauge volatility and anticipate price moves.

A shrinking ATR indicates a contraction in volatility, which often precedes a breakout. The presenter compares a 14‑day ADR of $5.59 with a 9‑day ADR of $5.30, while the ATR sits just below $7, illustrating the current market’s calm state.

He then aligns pivot points with these metrics—showing resistance at 713.30 and support at 7.64—as roughly one ATR apart. By projecting a $5‑$5.50 move from a high, he derives a probable low that matches the second support level.

Using ATR and ADR together gives traders a data‑driven way to set entry, stop‑loss, and target levels, improving risk management and increasing the odds of catching a breakout.

Original Description

Stop guessing where the stock is going. 🛑

In this clip from our latest webinar, John Rowland, CMT explains how to use the Average True Range (ATR) and Average Daily Range (ADR) as your "measuring stick" for market probability.

When you see these numbers start to constrict, it's often a sign that volatility is drying up—and a massive breakout could be right around the corner.

What you’ll learn in this breakdown:

• What ATR and Average Daily Range tell you

• How to spot decreasing volatility

• Why shrinking ATR can signal a breakout

• How to use ATR to estimate support and resistance levels

If you want to move from "gambling" to "statistical trading," you need to understand the math of the move.

Check the ATR for your stocks here: https://www.barchart.com/etfs-funds/quotes/SPY/technical-analysis

Stream John's full webinar on the related video: https://www.youtube.com/watch?v=Wwpgqx1fBjU