Average True Range (ATR) Indicator
61ATR is a volatility indicator.
Average True Range is a moving average of the True Range over "X" periods, usually 14-days. True Range is the greatest difference from the following choices:
• Today's high and today's low.
• Today's high and yesterday's close, or
• Today's low and yesterday's close.
True range is always a positive number (negative numbers from the calculation above are to be ignored).
Major tops are typically accompanied by high volatility during the blow-off phase of a market, as investors become more and more nervous and ready to take profits. Major bottoms are usually calmer, with low volatility, as the hopes for quick profits have faded.
See also
