Average True Range (ATR)

Average True Range (ATR) is a technical analysis indicator developed by J. Welles Wilder, based on trading ranges smoothed by an N-day exponential moving average. True range extends to the previous closing price if it was outside the range of the current bar/candle.

True range is the largest of these three values:

  • High - Low
  • Absolute value of the most recent high minus the previous close
  • Absolute value of the most recent low minus the previous close

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Read more about ATR on Wikipedia.