what is atr indicator

what is atr indicator

1 year ago 70
Nature

The Average True Range (ATR) is a technical analysis indicator that measures market volatility by showing the average price variation of assets within a given time period. It was developed by J. Welles Wilder Jr. and was originally designed for commodities, but it can also be used for stocks and indices. The ATR is calculated by taking the average of true ranges over the specified period, which takes into account any gaps in the price movement. A higher ATR signals more volatility, and a lower ATR indicates lower volatility for the period evaluated. The ATR is not directional, meaning it does not indicate the price direction, but it is used primarily to measure volatility caused by gaps and limit up or down moves. The ATR is commonly used as an exit method that can be applied no matter how the entry decision is made. It is also useful for stops or entry triggers, signaling changes in volatility. The ATR can be calculated by finding the True Ranges for a fixed set of time.

Read Entire Article