Average True Range

November 13th, 20111810 Comments

average-true-range technical-analysis tutorial

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We have introduced several technical analysis tools and talked about them here and here.

Quoting from stockcharts:

Developed by J. Welles Wilder, the Average True Range (ATR) is an indicator that measures volatility. It is important to remember that ATR does not provide an indication of price direction, just volatility.

At techpaisa,we use a 14-day period (most common period) to calculate ATR. You can find ATR in technical analysis section on each stock page at techpaisa. ATR is calculated using stock prices and is not normalized, which means, a stock with price Rs. 100 will have a lower ATR than a stock with price Rs. 1000. ATR can be used to identify breakouts. When a breakout occurs, ATR suddenly goes up.

For more details, check out following links.

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Happy Investing!

Techpaisa Team.