Definitions for "Average True Range"
Average True Range (ATR) is a volatility indicator. It is also used as part...
True range is the greatest of the following differences: 1. Today's high to today's low 2. Today's high to yesterday's close 3. Today's low to yesterday's close The range is normally the 'high-low.' However, any time the value of yesterday's close is not within the range of today's bar, rule b) or rule c) applies. As with most other indicators, the periodic value is summed and smoothed to create the final indicator.
The average over the last "X" periods of the true range of prices which is the largest of the following: (1) current period's high minus current period's low; (2) current period's high minus previous period's close; or (3) current period's low minus previous period's close. A common period used by traders is daily.
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