What is the true range in trading?

Remember, the true range is the highs minus the lows. The time frame many traders tend to use the most is a period of 14 days. You can use shorter periods. It all depends on how you trade. Changes within the average true range show a change in volatility. You’ll see this with a sharp rise and fall in price action.

What is average true range (ATR)?

TradingView. Average true range (ATR) is a technical indicator measuring market volatility. It is typically derived from the 14-day moving average of a series of true range indicators. It was originally developed for use in commodities markets but has since been applied to all types of securities.

What does a high value of average true range mean?

A high value of average true range implies high volatility of the market price of the assets and a low value implies low price variations. The calculation of the average true range is 14-period based. The period can be intraday, daily, weekly, or monthly.

What is a true range indicator?

The true range indicator is taken as the greatest of the following: current high less the current low; the absolute value of the current high less the previous close; and the absolute value of the current low less the previous close. The average true range is then a moving average, generally using 14 days, of the true ranges. TradingView.