Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 90% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 90% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Forex Glossary

The Industry's Most Important Terms Explained

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!


ATR

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 difference between the current period’s high and low
  • The absolute value of the difference between the previous period’s close and current period’s high
  • The absolute value of the difference between the previous period’s close and current period’s low

The Average True Range is the moving average of the true range values.

Category: Technical Indicators

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