Average True Range (ATR)
Average true range: the true range of each bar smoothed over a period, a measure of volatility used to size stops and positions.
How to read it
- Rising ATR means bars are getting larger; falling ATR means the market is calming.
- ATR does not show direction, only the size of moves.
- Stops are often placed a multiple of ATR away from entry.
Key settings
- Period 14, smoothing RMA (also SMA, EMA, WMA).
Good to know
- Drawn in its own pane below the chart.