ATR (Average True Range) Volality Bands for Intraday trading: version 2

• here is a 15M chart of the NQU09.D from around 1130 am this morning...
• using an ATR calculation, i want to try to predict where the probable intraday high and low ranges will be for the NQ...
• the subchart displays the ATR volatility in percent terms...the yellow vertical bar histogram shows how volatile each intraday session is....currently the difference between the true high and the true low for the current daily bar in the NQ is 1.31% of the last trade in the NQ....the red horizontal line is an 8 period moving average of the daily ATR volatility...it is currently at 1.84%
• so far for today, the NQ is less volatile than its 8 day average volatility...
• i use the average ATR volatility to help determine where the ultimate high and the ultimate low for the current daily bar might be...there is no guarantee the NQ will trade to these levels, however if the NQ has a typical day, then attempting to project these high and low range areas may have some relevance...
• however, i believe it would not be useful to attempt to predict the exact high and the exact low, so i have opted to try to predict a high range and a low range...
• the calculations for the high range are relatively straight forward: in order to project the high, i use the known true low and then add the current average ATR...this gives me a firm projected high...however, i don't want a firm projected high, but rather a projected high range, so i tweak the firm projected high with a user defined 'band variance factor'...the 'band variance factor' replaces the projected firm high with two new highs, one above the firm high and the other below the firm high...the size of the expansion is dictated by the size of the 'band variance factor'...these two highs are then plotted on the chart of the NQ...
• the dark red band represents the upper portion of the projected high range...the red band represents the lower portion of the projected high range...
• the calculations for the low range are relatively straight forward: in order to project the low, i use the known true high and then subtract the current average ATR...this gives me a firm projected low...however, i don't want a firm projected low, but rather a projected low range, so i tweak the firm projected low with a user defined 'band variance factor'...the 'band variance factor' replaces the projected firm low with two new lows, one above the firm low and the other below the firm low...like mentioned above, the size of the expansion is dictated by the size of the 'band variance factor'...these two lows are then plotted on the upper chart of the NQ...
• the dark green band represents the lower portion of the projected low range...the green band represents the higher portion of the projected low range...
• i specifically used the dark red, red, green and dark green colors...if my bias was to be long, i would look to buy some near the green line, and buy some more near the dark red line....then i would look to sell some near the red line and sell some more near the dark red line...if my bias was short, then i would look to short some near the red line, and short some more near the dark red line...then i would look to cover some near the green line and then cover some more near the dark green line....
• if long and the vehicle traded below the dark green line, then perhaps a stop loss would be in order...if short and the vehicle traded above the dark red line, then perhaps a stop loss would be in order...
• however, this would not be my only analysis tool for determining optimal entries, exits and stops...i would also be using multiple time frame analysis, moving averages and pivots...these projected intraday highs and lows would be another analysis tool to help me optimize my entries, exits and stops...
• the 'band variance factor' is user defined and easily changed...
• i am excited to have added this tool to my trading toolkit...
• currently i am using this indicator for the NQ but it can be used for any symbol...
• if you are interested in taking this indicator out for test run and you use tradestation, then let me know and i will send it over to you free of charge...
• if anyone has any ideas on how to improve this indicator, especially on how to optimize the 'band variance factor' such that it creates true high ranges and true low ranges that get pierced a significantly high amount of the time that then lead to reversals, then please let me know...