The forex industry is made up of countless definitions and it's easy to forget a few along the way. But because no forex education can be complete without a glossary of forex terms, we've compiled one which aims at explaining key definitions in the simplest way possible. This way, you'll never be lost or confused again!
The Average True Range is an indicator developed by Welles Wilder to measure volatility.
Wilder believed that high ATR readings occur at bottoms after a strong downtrend characterized by “panic” sell-off. Low ATR readings are usually found at tops and during periods of consolidation.
Trend reversals are usually accompanied by high ATR values, whereas sideways movements or weak trends are accompanied by low values.
The True Range is the greatest of the following:
The Average True Range is the moving average of the true range values.
Category: Technical Indicators