Oscillators: Average True Range (ATR)

Average True Range (ATR) is a market volatility index developed and described by W. Wilder in his book "New concepts of the technical trading systems".

True Range is the greatest among three following volumes:

• the difference between the top and the bottom of the current bar;
• the difference between the close of the previous bar and the top of the current bar;
• the difference between the close of the previous bar and the low of the current bar.

Average True Range (ATR) is the moving average of the true range values. To add Average True Range index in MetaTrader 4 use the "Insert -> Indicators -> Oscillators -> Average True Range" menu sequence:

Average True Range (ATR) oscillator analysis basics:

• The greater the oscillator value, the greater the possibility for trend reversal.
• The smaller the value the weaker the trend.

Warning: This document does not constitute an offer or a recommendation to enter into any transaction. All views and statements expressed are believed to be true and accurate when published. Any person relying on this information to trade does so entirely at his/her own risk. The markets can be very volatile. Prices may move rapidly against you, and past performance is not necessarily a guide to future performance.