Tool
Average True Range
market.atr
Inputs
No typed inputs.
Outputs
A positive volatility line: bigger values mean wider bar ranges (more volatile), smaller values mean quieter bars. It carries no direction — it never says up or down.
ATR (Average True Range) measures how much price moves on a typical bar — its volatility. It is a single positive line, not a direction: a bigger ATR means wider bar ranges (a busier, more volatile market), a smaller ATR means quieter bars.
How it works
For each bar it takes the 'true range' (the largest of: high minus low, or the gap from the prior close), then averages that over the period (default 14 bars). When ranges expand the line rises; when the market calms down the line falls.
Configuration
How many bars to average the true range over. Larger = smoother and slower to react; smaller = faster but noisier. 14 is the classic default.
Connects to
Examples
- Stop-loss sizing: multiply ATR by a factor and wire it into CreateOrder's SL so the stop adapts to current volatility.
- Filter: only take breakout entries when ATR is rising, confirming the market has the energy to follow through.
Common mistakes
- Reading ATR as a direction signal — it only measures the size of moves, not whether price is going up or down.
- Comparing raw ATR across different symbols; a 0.0010 ATR on EURUSD and a 5.0 ATR on an index aren't comparable. Use NATR for that.