ATR indicator was created by Welles Wilder and introduced in his book “New Concepts in Technical Trading Systems”(1978)
The ATR (Average True Range) is a volatility measuring indicator measures a security's volatility. As such, the indicator does not provide an indication of price direction or duration, simply the degree of price movement or volatility.
How does the ATR work?
During more volatile markets ATR moves up, during less volatile market ATR moves down.
When price bars are short, means there was little ground covered from high to low during the day, then Forex traders will see ATR indicator moving lower. If price bars begin to grow and become larger, representing a larger true range, ATR indicator line will rise.
The ATR is the moving average of the TR for the giving period (typically 14 days)
Average True Range Formula
ATR = Moving Average (TRj, n), Where TRj = maximal modules from three values |High - Low |, |High - Closej-1 |, |Low - Closej-1 |.
The ATR (Average True Range) is a volatility measuring indicator measures a security's volatility. As such, the indicator does not provide an indication of price direction or duration, simply the degree of price movement or volatility.
How does the ATR work?
During more volatile markets ATR moves up, during less volatile market ATR moves down.
When price bars are short, means there was little ground covered from high to low during the day, then Forex traders will see ATR indicator moving lower. If price bars begin to grow and become larger, representing a larger true range, ATR indicator line will rise.
The ATR is the moving average of the TR for the giving period (typically 14 days)
Average True Range Formula
ATR = Moving Average (TRj, n), Where TRj = maximal modules from three values |High - Low |, |High - Closej-1 |, |Low - Closej-1 |.
Download
ATR ratio.mq4
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