Average True Range (ATR)

Average True Range

ATR (Average True Range) is a technical indicator that measures price volatility of a security. It improves the more widely used Range, which is simply the difference between the highest and lowest price in a particular period. While (traditional) Range does not account for price changes between time periods (days or bars) in any way, ATR does, which makes ATR a better measure of price volatility in some cases (especially for markets which tend to make opening gaps often).

What Is ATR and Why Use It in Trading

Average True Range (ATR) is a technical indicator first introduced by J. Welles Wilder Jr. in his 1978 book New Concepts in Technical Trading Systems – the same author in the same book also introduced other popular indicators such as the Relative Strength Index (RSI), Average Directional Index (ADX) or [more…]

True Range and How It Differs from Range

The concept of true range and calculation of ATR (Average True Range) is confusing for many people, as you are actually comparing three values instead of applying one exact formula. This page is a detailed guide to calculation of true range. I’ve tried to attach a few simple chart examples [more…]

ATR Calculation Methods and Formulas

This page explains the calculation of Average True Range (ATR). We will look at all three commonly used calculation methods – simple, exponential, and the original Wilder’s smoothing method. We will also compare the results of these methods on some examples, pointing out their different characteristics. Calculating True Range Average [more…]

Calculating Average True Range (ATR) in Excel

This is a detailed guide to calculating Average True Range (ATR) in Excel. We will first calculate true range and then ATR as moving average of true range. We will do all the three popular ATR calculation methods – simple, exponential, and the original Wilder’s smoothing method. You don’t need [more…]

Calculating ATR in Excel: EMA & Wilder's Methods

This is the second part of the Average True Range (ATR) Excel tutorial. In the first part we have calculated ATR using the simple moving average method. Now we will calculate ATR using the two other popular methods – exponential moving average and Wilder’s smoothing method. From the first part [more…]

Normalized ATR: Two Ways of Expressing ATR as Percentage

Average True Range (ATR) is a very useful measure of volatility, but it has downsides. Because it is derived from range (or to be precise, true range) and expressed as absolute dollar value, it is not directly comparable across securities and over time. For example, a stock trading around 10 [more…]

Average True Range (ATR) Period and Which to Use

Average True Range (ATR) takes only one parameter and that is the period length. Some users of the ATR Calculator have asked the question which period setting they should use – which is “the best”. The answer is of course there is no such thing as the best or most [more…]

Volatility, Range, True Range, and ATR

Using Range for Measuring Volatility The easiest way to quickly measure market’s volatility during a particular trading day or week is by calculating the Range. Price Range is simply the absolute difference between the highest and the lowest price reached during a particular time period (e.g. a trading day). Range [more…]

Calculating Range In Excel

Range is the difference between minimum and maximum value in a dataset. In Excel you can calculate range using the functions MIN and MAX. For example, if you have your data in cells A1 to A15, you can calculate range in a single formula: =MAX(A1:15)-MIN(A1:A15) The first part of the [more…]