EURUSD 1.1769 USDJPY 112.19 USDCAD 1.2389 EURCZK 26.036 USDCZK 22.113 EURPLN 4.2871 USDPLN 3.6425
EURUSD 1.1769 USDJPY 112.19 USDCAD 1.2389 EURCZK 26.036 USDCZK 22.113 EURPLN 4.2871 USDPLN 3.6425

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ATR measures the price volatility of an asset, showing the degree of interest in an asset

Rule of thumb

Wilder constructed the ATR indicator based on daily periods and commodities, however it can also be applied to other markets and timeframes

The ATR indicator was created by J. Welles Wilder - the author of the Relative Strength Index. Its purpose is to measure the market volatility upon the basis of historical price values.

 

atr, average true range

 

Unlike other indicators, the ATR does not identify any potential market directions. Instead it reflects the dynamics of market action in a given period of time. In a case where the situation on  a market is stable and the prices remain close to a certain level, the ATR value will be low.

 

On the other hand, sharp market movements and frequent changes of situation in a short period of time, that typically occur during important data releases, constitute  high market volatility. Such circumstances are reflected   by high levels of the ATR indicator.

 

From the construction of the ATR  it is observable that the indicator has no maximum value, while its minimum value is zero – that reflects the situation when the market price that does not change at all. By default, the ATR is calculated taking into account the last 14 periods, in accordance with the suggestions of its author Wilder. This should not prevent its users from experimenting with other values, capturing the volatility in a longer or shorter time perspective.

 

How to use it with MetaTrader 5:

  • Select options “Insert” /”Indicators”/”Oscillators” and then “Average True Range”.
  • Indicate the requested parameter of the indicator, by default the value is 14.
  • The Average True Range will be created automatically by MetaTrader 5.

Pola oznaczone gwiazdką są wymagane.

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