JoymistaWhat Is ATR and How Is It Used for Stop-Losses?
ATR measures the average price range per candle over a number of candles (14 by default), giving you a sense of how volatile the market is now.
Explained
A candle’s true range is the largest of: high − low, |high − previous close| and |low − previous close|; ATR is its average. ATR says nothing about direction, but it helps you place a stop at a distance that fits how much the market is moving instead of a fixed number.
Example
Example with made-up numbersHigh 105, low 100, previous close 98, so the true range is the largest of 5, 7 and 2, which is 7.
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Related terms
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Open in JoymistaEducational content, not investment advice.