ATR % Line from LoD/HoD

ATR % Line Trading Indicator - Entry Filter Tool

This Pine Script creates a sophisticated ATR (Average True Range) percentage-based entry filter indicator for TradingView that helps traders avoid buying overextended stocks and identify optimal entry zones based on volatility.

Core Functionality - Entry Discipline

The script calculates a maximum entry threshold by taking a percentage of the Average True Range (ATR) and projecting it from the current day's low. This creates a dynamic "no-buy zone" that adapts to market volatility, helping traders avoid purchasing stocks that have already moved too far from their daily base.
Key Calculation:

Measures the ATR over a specified period (default: 14 bars)
Takes a user-defined percentage of that ATR (default: 25%)
Projects this distance from the day's low to establish a maximum entry threshold
Entry Rule: Avoid buying when price exceeds this ATR% level from the daily low or high.



Visual Features

Entry Threshold Line:

Draws a horizontal line at the calculated maximum entry level
Line extends forward for clear visualization of the "no-buy zone"
Red zones above this line indicate overextended conditions
Fully customizable appearance with color, width, and style options

Smart Entry Alerts:

Optional labels show the ATR percentage threshold and exact price level
Visual confirmation when stocks are trading in acceptable entry zones vs. extended areas

Real-Time Monitoring Table:

Displays current distance from daily low as ATR percentage
Shows whether current price is in "safe entry zone" or "extended territory"
Customizable display options for clean chart analysis



Practical Applications for Entry Management

Avoiding Extended Entries:

Primary Use: Don't initiate long positions when price is more than X% ATR from the daily low
Prevents buying stocks that have already made their daily move
Reduces risk of buying at temporary tops within the trading session

Entry Zone Identification:

Price trading below the ATR% line = potential entry opportunity
Price trading above the ATR% line = wait for pullback or skip the trade
Combines volatility analysis with momentum discipline

Risk Management Benefits:

Improved Entry Timing: Enter closer to daily support levels
Better Risk/Reward: Shorter distance to stop loss (daily low)
Reduced Chasing: Systematic approach prevents FOMO-driven entries
Volatility Awareness: Higher volatility stocks get wider acceptable entry ranges



Configuration for Entry Filtering

Key Settings for Entry Management:

ATR Percentage: Set your maximum acceptable extension (15-30% common for day trading)
Reference Point: Use "Low" to measure extension from daily base
Line Style: Make highly visible to clearly see entry threshold
Alert Integration: Visual confirmation of entry-friendly zones

Typical Usage Scenarios:

Conservative Entries: 15-20% ATR from daily low
Moderate Extensions: 25-35% ATR for stronger momentum plays
Aggressive Setups: 40%+ ATR for breakout situations (use with caution)



Entry Strategy Integration

Pre-Market Planning:

Set ATR% threshold based on stock's typical volatility
Identify key levels where entries become unfavorable
Plan alternative entry strategies for extended stocks

Intraday Execution:

Monitor real-time ATR% extension from daily low
Avoid new long positions when threshold is exceeded
Wait for pullbacks to re-enter acceptable entry zones

This tool transforms volatility analysis into practical entry discipline, helping traders maintain consistent entry standards and avoid the costly mistake of chasing overextended stocks. By respecting ATR-based extension limits, traders can improve their entry timing and overall trade profitability.