Deep Dive
Everything You Need to Know
Under the Hood
How It Works
True Range is the greatest of: current high minus current low, absolute current high minus previous close, or absolute current low minus previous close. ATR averages these.
In Practice
How Traders Use It
ATR helps set stop-loss levels and position sizes. Higher ATR values indicate higher volatility. It does not indicate price direction, only volatility.
Highlights
ATR at a Glance
Measures volatility, not direction
Default period: 14
Used for stop-loss placement
Higher ATR = higher volatility
Essential for position sizing
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