CONSTRUCTING AN ATR BREAKOUT SEARCH By Daryl Guppy

The combination ATR trend breakout delivers good trading opportunities. Finding these opportunities can be time consuming. This week we look at a shortcut to create a stock pool that has high probability candidates that can be assed with the traders ATR breakout.

The stock pool is created using a 10 and 30 day moving average crossover search to create the initial stock pool. We also use a volume filter to eliminate low volume or erratic trading stocks.

The 10 and 30 day moving average crossover search creates a stock pool that can be quickly verified for ATR entry signals. Note that this is most easily applied using Guppy Traders Essential charting.

This is the type of situation we are looking for.

Step 1 get rid of inactive stocks and also find only those that meet a volume criteria. We give the full details at the end of the article for MetaStock.

Step 2 moving average cross over search. We want to do this search once a week to help identify candidates. You can adjust the

reference period by changing the number highlighted in yellow.

STMA:= Mov(CLOSE,10,E); LTMA:= Mov(CLOSE,30,E); Signal:=Cross(STMA,LTMA ); Alert(Signal,5) This exploration starts with a DEADDAYS search. When running this second exploration

select USE RESULTS FROM LAST EXPLORATION as this will look only at the results of the FIND ALL exploration.

Step 3 export the list. To export the list to a spread sheet right click anywhere on the report screen. Select

COPY and then open a new spread sheet.

Select paste from the Excel menu and the full list of stocks will be pasted into the spread

sheet. Use this list to open stocks in Guppy Traders Essential Charting package and apply the traders ATR.

Step 1 get rid of inactive stocks. First we create an indicator. We call this DEADDAYS. The name is critical because this

will be used as a reference formula in the exploration.

DayOfMonth()=11 AND Month()=6 AND Year()=2013 The purpose is to locate stocks that have traded on the specified date. The sections in

yellow highlight are changed prior to each search. This formula name is referenced in the first exploration criteria.

We call our first exploration FIND ALL Australia. Vol FILTER

Col A: CLOSE*VOLUME Filter Fml("deaddays") AND colA >=150000 Running this search across the entire database of Australian stocks creates a reference

list of actively traded stocks further filtered by volume. This ensures that the reference list always has good liquidity. TRADING METHODS EYEBALLING Good trades leap off the chart. They are clear trend trading opportunities, or clear trend breakout opportunities. Specialist trades, such as parabolic trends, are most easily seen when we look at the chart. Eyeballing makes use of the ability to use experience and summarise a chart in the blink of an eye. This experience comes from looking at many charts every day. At first this appears to be a time consuming process, but with practice, it is a fast and efficient way to find clear simple, profitable trading opportunities. We train ourselves to apply this technique by looking closely at the chart every time we have cause to look at a stock for any reason. In time you will learn to recognise clear trends, and clear chart patterns. This is an important trading skill.

Eyeballing remains one of the quickest and most effective ways to find profitable trading opportunities.