Technical indicator “Average True Range”, also usually named as “ATR”


Calculation :

This represents the volatility of a stock.

True range is the highest data in absolute value among :

(today’s high – today’s low)

(today’s high – yesterday’s close)

(today’s low – yesterday’s close)


To calculate the Average True Range, it is necessary to apply a Wilder moving average of the True Range.

Interpretation :

This indicator of volatility measures selling  pressure and buying pressure. When the ATR rises there is more and more and more pressure and a strong volatility of the stock.

When the ATR decreases there is less and less pressure and a low volatility.





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