Average True Range (ATR)


Average True Range (ATR)

Average True Range (ATR) is a market volatility index developed and described by W. Wilder in his book "New concepts of the technical trading systems".
True Range is the greatest among three following volumes:
  • the difference between the top and the bottom of the current bar;
  • the difference between the close of the previous bar and the top of the current bar;
  • the difference between the close of the previous bar and the low of the current bar.
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Average True Range (ATR) oscillator analysis basics:
  • The greater the oscillator value, the greater the possibility for trend reversal.
  • The smaller the value the weaker the trend.