Average True Range Indicator

How ATR works

This tool is responsible for determining the volatility values relative to the price of the trading instrument. It works by operating with 14 periods capped by daily and longer timeframes. High values are read and analyzed as a breakout in trend, while low values reflect a range of trading.

Formula:

Average True Range is a moving average of the True Range which has the highest value among the following:

  • The distance from today’s high to today’s low
  • The distance from yesterday’s close to today’s high
  • The distance from yesterday’s close to today’s low
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