Volatility Indicators
Normalized Average True Range (NATR)
Normalized Average True Range
Deep Dive
Everything You Need to Know
Under the Hood
How It Works
NATR is ATR (Average True Range) normalized as a percentage of closing price: (ATR / Close) × 100. This normalization makes volatility comparable across different price levels - crucial for cryptocurrencies where BTC at $20k versus $60k has vastly different ATR values but similar percentage volatility. NATR uses default 14-period ATR calculation, then converts to percentage terms. Values represent average percentage movement per bar, making volatility analysis price-scale independent. This allows direct comparison of volatility across different assets, timeframes, and price regimes.
In Practice
How Traders Use It
Cryptocurrency traders use NATR to compare volatility across different coins and price levels objectively. A BTC NATR of 3% and an altcoin NATR of 8% clearly shows the altcoin is relatively more volatile regardless of absolute prices. NATR is essential for position sizing - higher NATR requires smaller position sizes to maintain consistent risk. It works well for identifying volatility expansions/contractions as percentages, setting stop-loss distances proportional to volatility, and comparing historical volatility regimes. NATR combines effectively with Bollinger Bands for percentage-based bands, with RSI for volatility-regime filtering, and for portfolio risk management across multiple assets.
Highlights
NATR at a Glance
- ATR normalized as percentage of price
- Formula: (ATR / Close) × 100
- Default 14-period calculation
- Makes volatility comparable across price levels
- Essential for comparing different cryptocurrencies
- Critical for volatility-based position sizing
- Values show average % movement per bar
- Best for multi-asset portfolio management
- Combine with Bollinger Bands or RSI
- Popular among risk managers and portfolio traders
Related
More Volatility Indicators
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FAQ
Frequently Asked Questions
What is the Normalized Average True Range (NATR) indicator?
Normalized Average True Range
How does NATR work?
NATR is ATR (Average True Range) normalized as a percentage of closing price: (ATR / Close) × 100. This normalization makes volatility comparable across different price levels - crucial for cryptocurrencies where BTC at $20k versus $60k has vastly different ATR values but similar percentage volatility. NATR uses default 14-period ATR calculation, then converts to percentage terms. Values represent average percentage movement per bar, making volatility analysis price-scale independent. This allows direct comparison of volatility across different assets, timeframes, and price regimes.
How do traders use NATR in their strategies?
Cryptocurrency traders use NATR to compare volatility across different coins and price levels objectively. A BTC NATR of 3% and an altcoin NATR of 8% clearly shows the altcoin is relatively more volatile regardless of absolute prices. NATR is essential for position sizing - higher NATR requires smaller position sizes to maintain consistent risk. It works well for identifying volatility expansions/contractions as percentages, setting stop-loss distances proportional to volatility, and comparing historical volatility regimes. NATR combines effectively with Bollinger Bands for percentage-based bands, with RSI for volatility-regime filtering, and for portfolio risk management across multiple assets.
What are the key points to know about NATR?
ATR normalized as percentage of price Formula: (ATR / Close) × 100 Default 14-period calculation Makes volatility comparable across price levels Essential for comparing different cryptocurrencies Critical for volatility-based position sizing Values show average % movement per bar Best for multi-asset portfolio management Combine with Bollinger Bands or RSI Popular among risk managers and portfolio traders
Can I use NATR with Cryptorobot.ai?
Yes. Normalized Average True Range (NATR) is available as a built-in indicator in Cryptorobot.ai. You can add it to any automated strategy using the no-code strategy builder, backtest it against historical data, and deploy it live on supported exchanges.