CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

The ATR Expansion Day indicator

This indicator visualizes a sudden day of high volatility after a period of lower volatility. Hence the term ‘expansion day’. ATR refers to the Average True Range (created by J. Welles Wilder). This measure of volatility is used to calculate the indicator. A sudden increase in volatility always brings opportunities for traders.

The ATR Expansion Day indicator is used by the well-known German trader Birger Schäfermeier. Birger Schäfermeier uses this information to identify trading opportunities for the next day.

The advantages of this indicator:

  • A sudden increase in volatility becomes visible.
  • The size of the volatility is visible.
  • A well-known trader uses this indicator.
  • The indicator can be used on every instrument.
  • The indicator is very visual and easy to interpret.
  • The indicator is FREE.

The time frame is always a 1-day chart. The indicator is shown below the main chart. Two components make up the indicator: a band and a histogram. The band indicates the volatility range. The histogram indicates the day’s price range (high minus low).

When the histogram goes above the band, an expansion day occurs.

This example shows seven expansion days. Three of these occur in sequence. Expansion days and the days following expansion days often offer traders good opportunities.

ATR Expansion Day, Birger Schäfermeier.
 

Practical implementation

Open the chart of an instrument. In the WHS Proposals folder, select the ATR Expansion Day indicator.