Average true range
Also called: ATR, true range
The average over N periods of each session's true range, a measure of how much a share typically moves, including gaps.
True range is the largest of today's high minus low, today's high minus yesterday's close, and yesterday's close minus today's low. ATR measures the size of moves, not their direction, and is used to compare volatility and set stop distances that fit a share's normal movement.
Example
True ranges of 10, 10, 7, 12 and 8 give a five-day ATR of ₹9.40.
Learn more in these lessons
- Average true range (ATR)What is the average true range, and how is it used?
- Placing stop-lossesWhere should a stop-loss be placed?
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