# 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.