1st, ATR by itself is not helpful. You need ATR%.
2nd, a stock could drop 5% a day for 5 days and that would be a 25% drop. So, ATR or ATR% is not enough.
You need an MTR (14), which is Max True Range. That will tell you if the stock is actually trading within a range. Because if the ATR% is 5 and the MTR% is 7, then you know it only deviates (or has deviated) from its ATR by 2%. Which means the stock is truely moving 5% up and 5% down day after day after day. That is pure gold to a robotic trader.
But if the MTR%-ATR% is too big, the stock is not a good candidate for this strategy.
SOLUTION:
WATCH LIST RULES: (only loads symbols that meet these conditions)
ATR%(14) > 5
MTR%(14)-ATR%(14) < 10
OPEN POSITION RULES: (opens long when both conditions are true)
Current Price is at least 5% less than Yesterdays Close Price
Current Price is at least 5% less than Todays High Price
Current Price is at least 1% greater than Todays Low Price
(no use buying until it bounces off the bottom)
SET PROFIT GOAL: 5% (close if you make 5%)
SET STOP LOSS: 5% (close if you lose 5%)
Setting up a strategy like this literally takes a few minutes with CoolTrade, and the automated trader will do all the work. You just sit back and watch.
Good luck,
Ed