My mindset is that I am looking for a state where a move is "trying" to take place. I then position myself accordingly and see if it happens. As far as ATR, I don't believe it matters. What matters is that you understand what that level represents in terms of distribution of price from some sort of reference point.
Keep in mind that a consolidation (tightening/narrowing range) often precedes a breakout. So an ATR calculated over a short time interval will reflect a smaller range than typically occurs over a longer lookback period. In this case, an ATR calculated over a longer time interval might be a better choice.
You do realize, don't you, that you just described the purpose of the ATR? It's been around the block, passed through "Does This Thing Work?" tests long ago. You might give it a shot.
PRICE! And VOLUME! since, after all, we *are* all adults, we acknowledge that every transaction conforms to P*Q, and that in a world hungry for knowledge, the *only* two things that traders can count on is that there will be a price and a quantity, inherently associated with every single transaction. {we need a "Drop Mike" emogi}
Personally, I haven't found volume to be of value. In fact, more of a distraction. Sometimes volume and price go along together. Sometimes not. Besides, you don't get rewarded for having your play be "in tune with volume", whatever that would mean.
I failed to communicate properly. I meant that the length/multiplier of the ATR doesn't matter as long as you understand it's meaning. ATR is literally the heart of my trading.