What Is ATR?

Learn What Is ATR — part of our Volatility & ATR series on Trading Bite. Free trading education for Pakistan, India & Gulf traders. Educational use only; not financial advice.

Average True Range

ATR measures average price movement per bar over N periods (default 14). It does not show direction — only how much price typically moves.

Uses:

  • Setting stop distance proportional to current volatility.
  • Comparing whether today is quieter or wilder than usual.
  • Position sizing adjustments (Module 4 extension).
Price · ATR line rising = expanding volatility

On TradingView: add indicator “Average True Range”. Read values in price units (e.g. $15 on gold).