Average True Range (ATR)
Average True Range (ATR) is a technical indicator used to measure the volatility of a security. It is a measure of the average price range over a given period of time, typically 14 days. ATR is used to measure the volatility of a security, and it is often used to determine the stop-loss and take-profit levels for a trade. ATR is also used to identify potential breakouts and reversals in the market.
History of ATR
ATR was developed by J. Welles Wilder Jr. in his 1978 book, New Concepts in Technical Trading Systems. Wilder was a pioneer in the field of technical analysis, and he developed several indicators that are still widely used today. ATR was designed to measure the volatility of a security, and it is one of the most popular indicators used by traders and investors.
ATR is calculated by taking the average of the true range over a given period of time. The true range is the greatest of the following three values: the current high minus the current low, the absolute value of the current high minus the previous close, and the absolute value of the current low minus the previous close.
Comparison Table
Indicator | Description |
---|---|
ATR | Average True Range is a technical indicator used to measure the volatility of a security. |
Bollinger Bands | Bollinger Bands are a technical indicator used to measure the volatility of a security. |
Relative Strength Index (RSI) | Relative Strength Index is a technical indicator used to measure the momentum of a security. |
Summary
Average True Range (ATR) is a technical indicator used to measure the volatility of a security. It is calculated by taking the average of the true range over a given period of time. ATR is used to measure the volatility of a security, and it is often used to determine the stop-loss and take-profit levels for a trade. For more information about ATR, you can visit Investopedia, TradingView, and other financial websites.
See Also
- Bollinger Bands
- Relative Strength Index (RSI)
- Moving Average Convergence Divergence (MACD)
- On-Balance Volume (OBV)
- Commodity Channel Index (CCI)
- Stochastic Oscillator
- Parabolic SAR
- Fibonacci Retracement
- Price Channel
- Volume Weighted Average Price (VWAP)