Average True Range (ATR)
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    Average True Range (ATR)

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    Article Summary

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    Average True Range (ATR) is an indicator that measures volatility of the market prices (including gaps in price movements) and plots it on the chart as a moving average of the true ranges over a period. True range is taken as the largest value of the following differences:

    • the difference between the current high and the current low
    • the difference between the current high and the previous close
    • the difference between the previous close and the current low

    ATR = [ATRi-1 x (n - 1) + TR] / n
    TRi = max [(High- Low), |High- Closei-1|, (Lowi - Closei-1)]

    where:
    ATR– the Average of TRfor the period
    ATRi-1 – the Average True Range value preceding the ATRi value
    TR– the True Range value calculated for the period
    n – the number of periods

    Average True RangeAverage True Range

    INPUTS

    InputDescription
    LengthThe number of periods the indicator uses to calculate the ATR plot
    Average
    The following Moving Average types are available for calculations:
    • Simple. Simple Moving Average (SMA) is applied to ADX.
    • Wilders. Wilders Smoothing is applied to ADX.
    • Weighted. Weighted Moving Average (WMA) is applied to ADX.
    • Exponential. Exponential Moving Average (EMA) is applied to ADX.

    PLOTS

    The plot renders the data you are working with on the chart. You can show/hide a plot by clicking the corresponding item in the settings. Every plot has a set of basic settings that you can change: color, weight, and type.

    PlotDescription
    ATRThe Average True Range plot
    Color

    Click the color rectangle under the plot's name to open the palette. Use the slider at the bottom to set the opacity of the color.

    Palette

    To create a custom color:

    1. Clickto open the color picker
    2. By using the slider at the bottom, adjust the main color
    3. Then, set a shade for the main color on the palette

    The custom-created colors are added to your palette. To remove a custom color, drag it out of the palette.

    Weight
    Change the value (in px) to adjust the thickness of the plot.
    Type
    The following plot types are available:
    • Linear. The plot is displayed as a line.
    • Column. The plot is displayed as a histogram.
    • DifferenceThe plot is displayed as a line which represents the difference between High and Low prices of the bar.
    • PointsThe plot is displayed as points.
    • Text above candleThe plot is displayed as the price labels above candles on the chart.
    • Text below candleThe plot is displayed as the price labels below candles on the chart.
    • Triangle above candleThe plot is displayed as triangles above candles on the chart.
    • Color candle. The candles on candle-type charts are highlighted with specified colors.

    OVERLAYING

    Check Overlaying to display the indicator on the chart. Otherwise, the indicator is shown in a study pane down below.

    Note: To reset the settings, click Restore to Default next to the SETTINGS: INDICATOR'S TITLE