← All indicators
VolatilityBeginner
ATR — Average True Range
Measures typical range. Useful for stops, targets and “is the market wide or quiet?”.
Formula (conceptual view)
True range = max of (H−L, |H−prior close|, |L−prior close|). ATR = average of TR over N (classic 14).
Common parameters: Period 14
How to read
- ▸Rising ATR = expanding volatility; falling ATR = compression.
- ▸Fixed pip stops ignore regime; ATR multiples adapt study risk better.
- ▸Into news, ATR often jumps — cut size or stand aside.
- ▸If ATR doubled, old lot size may be reckless.
Common mistakes
- ✕ Using ATR as a direction signal.
- ✕ Stops tighter than noise without admitting it.
- ✕ Ignoring pair differences (JPY, gold, exotics).
Works well with
Position sizingStructure stopsSession study