A spread to ATR rule that decides whether to trade at all

[Amanhasnoname]

Most scalpers tune entries. A smaller number tune the decision to be in the market in the first place. A simple ratio can handle it.

The spread divided by the recent average range gives a measure of how expensive trading is relative to opportunity. When the spread is a small fraction of the typical movement, the market is cheap to trade. When the ratio rises, costs dominate.

A threshold, set by testing, switches trading on and off. For example, trade only when the spread is below 10 percent of the five-minute ATR. This avoids both dead and chaotic periods, in which the spread widens before the range does.

Different pairs need different thresholds. Majors can be strict, while crosses might need looser values.

The rule is easy to automate and review. Logging how many trades were skipped, and how they would have performed, validates the setting.

Many strategies improve more from this single filter than from any change in the entry signal.

What cost-to-range threshold would you consider reasonable?