How do you read the EUR/JPY ATR?

Beginner Questions
1

Hey all,

I’m kinda new to using the ATR, and so far I’ve noticed, on pairs other than the JPY, you can easily tell how many pips it is talking of. For e.g. EURUSD Daily ATR would look something like 0.0150, which would mean volatility of 150 pips.

Now here’s what I don’t understand, and can’t read yet: the JPY pairs. I’m on EURJPY Daily and it says 1.3000, looking at previous ATR values, I can see it goes above 1 to levels of 2.xxxx and 3.xxxx

My question: How do you read such ATR values? I want to figure out a volatility stop for myself and want to figure out the value in pips…

Thanks in advance

2

look at those figures in relation to price…

So EURUSD;
1.2550 for example
0.0150 = 150 pips

EURJPY;
106.50 for example
001.30 = 130 pips

So you need to look at where the decimal place is in relation to the current price to see how many pips the ATR value currently is

3

As its a yen pair, it only has 2 numbers after the decimal point meaning a move down from 110.00 to 105.00 is 500 pips. If the ATR is 1.30, then this is 130 pips

Edit: Beaten to it!

4

Awesome!

Thanks a lot, both of you, it makes much more sense now :smiley:

5

I like the EURJPY, one of my favourite pairs, this might help you, a trade I called to prove the strength of the strategy.

http://forums.babypips.com/free-forex-trading-systems/35742-correlate-die.html#post213787

6

Very interesting strategy. I knew correlation definitely existed amongst certain pairs, but I can only see it as another confirmation to a trading plan, that one may want to make rather than use it primarily to make a trade, as it’s own plan. I say that because I know they don’t always correlate and sometimes “putting all your eggs in one basket” can be a bad thing (e.g. if you short the 2 of the 3 pairs because they are correlating, and both go against you).

Thanks for the tip though! I’ll take a note of this strategy as an addition to my current “trend is your friend” strategy :smiley:

7

On the usd/jpy my ATR 14 number is .1121 for the H1 TF - is that 112 pips + 1 pipette or 1121 pips?

8

yes, it is as you say, 112 pips.
drop the last digit off the back on that pair. if you’re unsure, simply manualy check the high-low pricing over a recent quota of activity.

9

Thank you very much. I rarely trade this pr. but I did see a good setup earlier in the week but was unsure of the ATR amount - I used previous swing hi and swing lo for SL & TP. thanks again, d.