Drop your number, and we will call you

NIFTY

10640.95      -83.45 -0.78%

BANK NIFTY

26654.25      -140.00 -0.52%
ACC 1331.70 (-1.53%) Link
Symbol     LTP Chng%
RPOWER 11.35   + 11.27
RCOM 6.10   + 10.91
RELINFRA 123.15   + 7.13
DISHTV 35.15   + 6.84
RHFL 25.55   + 6.68
Symbol     LTP Chng%
GVKPIL 5.30    -8.62
HSCL 95.35    -7.79
IRB 111.95    -7.44
FINPIPE 455.10    -7.28
IBVENTURES 270.70    -6.62
View All

Average True Range (ATR)

Introduction

The True Range Indicator is the greatest of the following: - Current high less the current low. - The absolute value of the current high less the previous close. - The absolute value of the current low less the previous close. "The average true range is a moving average (generally 14-days) of the true ranges".

ATR was originally developed for commodities but the indicator can also be used for stocks and indexes. Simply put, a stock experiencing a high level of volatility will have a higher ATR, and a low volatility stock will have a lower ATR.

Formula

Current ATR = [(Prior ATR x 13) + Current TR] / 14

Advantage

ATR is not a directional indicator, such as MACD or RSI. Instead, ATR is a unique volatility indicator that reflects the degree of interest or disinterest in a move. Strong moves, in either direction, are often accompanied by large ranges, or large True Ranges. This is especially true at the beginning of a move. Uninspiring moves can be accompanied by relatively narrow ranges. As such, ATR can be used to validate the enthusiasm behind a move or breakout. A bullish reversal with an increase in ATR would show strong buying pressure and reinforce the reversal.

Sample Calculation

Technical chart for ATR

Technical Indicators

Our Partners

Fyers-traderguide.in
Zerodha-traderguide.in
Tradejini-traderguide.in
5paisa-traderguide.in
stockphoenix-traderguide.in
  • For sales: +91 74051 00012

  • For support: +91 74052 00012