What is an ATR indicator & how does it work?

By default, the ATR indicator takes the true range of the last 14 sessions and converts it into a moving average, which is shown as a line. As with most indicators, you can tweak it to include as many sessions as you want. Short-term traders often use ATRs of ten sessions or fewer.

What is the average true range indicator?

Investors can use the indicator to determine the best time for trading. The average true range also takes into account the gaps in the movement of price. The average true range is an indicator of the price volatility of assets over a specific period.

What is an ATR period?

An ATR period is the number of days, weeks, months, or years included in the moving average. It is traditionally 14 days but can be longer or shorter. A more extended ATR timeframe (20 to 50 periods) would be less responsive near-term changes. Therefore, only significant changes would register.