ATR - Average Ture Range
- 1. Chapter – 3 Average True Range (ATR)
- 2. Average True Range (ATR) The Average True Range (Wilder) measures market volatility. High ATR values may signal market bottoms, and low ATR values may signal neutral markets. • During more volatile markets ATR moves up, • During less volatile market ATR moves down. • When price bars are short, means there was little ground covered from high to low during the day • If price bars begin to grow and become larger, representing a larger true range, ATR indicator line will rise. • ATR indicator doesn't show a trend or trend duration.
- 4. How to trade with Average True Range (ATR) • ATR standard settings - 14. Wilder used daily charts and 14- day ATR to explain the concept of Average Trading Range. • The ATR (Average True Range) indicator helps to determine the average size of the daily trading range. • It tells how volatile the market is and how much does it move from one point to another during the trading day.
- 5. How to trade with Average True Range (ATR) • ATR is not a leading indicator, means it does not send signals about market direction or duration, but it gauges one of the most important market parameter - price volatility. • Traders use Average True Range indicator to determine the best position for their trading Stop orders - such stops that with a help of ATR would correspond to the most actual market volatility.