The ATR Channel Breakout Trading System is a variation on the Bollinger Breakout System which uses Average True Range instead of Standard Deviation as a measure of the Volatility which defines the width of the channels or bands.
Market fluctuates between low volatility and high volatility. Therefore any system which a trader uses, should account for market volatility.
In this system, volatility is measured based on Average True Range (ATR). The center of the channel is Exponential Moving Average (EMA) defined by the number of days as selected by the trader. Whereas, top and bottom of the channel are defined by using multiple of ATR from the moving average.
The ATR Channel Breakout system is a form of breakout system that buys on the next open when the price closes above the top of the ATR Channel, and exits when the price closes back inside the channel. Short entries are the mirror opposite with selling taking place when the price closes below the bottom of the ATR Channel.
The ATR Envelope or Average True Range Channel Breakout system is mentioned and tested in Curtis Faith's book, Way of the Turtle.
For the Buy and hold kind of trader, this system is worth looking at.
Sources: wisdomtrading.com, tradewithtrend.com