ATR (Average True Range)

What is ATR?

Average True Range measures market volatility by calculating the average of true ranges over 14 periods. True Range accounts for gaps by using the maximum of: High-Low, |High-PrevClose|, |Low-PrevClose|.

Parameters

• 14 periods: Smoothing period
• Price units: Absolute volatility

Interpretation

• High ATR: Wide price swings, volatile
• Medium: Normal trading range
• Low ATR: Tight range, consolidation

Price Overlay

• Enter Closer-Look mode to see close price overlay
• Toggle: Show/hide close price line (right axis)
• ATR expansion + price breakout = confirmed move

Trading Signals

• Rising ATR = increasing volatility
• Falling ATR = decreasing volatility
• Used for stop-loss placement (2xATR)