Average True Range (ATR)

In this page, you will learn what the Average True Range (ATR) is. Keep reading to find all the information you need.
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Updated: Sep 26, 2022
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What is Average True Range (ATR) or Average True Range?

The Average True Range, abbreviated ATR, is a technical indicator developed by J. Welles Wilder, Jr., published in his book “New Concepts in Technical Trading Systems” in 1979. The Average True Range provides a measure of market volatility.

The Average True Range is based on the True Range, which is the largest of the following measurements for a given period:

  • Difference between the highest maximum and the highest minimum
  • The absolute value of the current high minus the last close
  • The absolute value of the current low minus the last close

The ATR measure is useful because of its sensitivity to fluctuations in a currency ‘s value over different time periods, even when the difference between a period’s high and low is very small (which could indicate a false low). volatility).

Wilder originally developed the ATR with the commodity market but it can be used successfully in any market.

ATR (Average True Range)

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