Average True Range Indicator

Hello Deriv Community,

Average True Range can often reach a high value at the bottom of the market after a sheer fall in prices occasioned by panic selling. Low values of the indicator are typical for periods of sideways movement of long duration that happen at the top of the market and during consolidation.

The Average True Range can be interpreted according to the same principles as other volatility indicators. The principle of forecasting based on this indicator can be worded in the following way: the higher the value of the indicator, the higher the probability of a trend change; the lower the indicator’s value, the weaker the trend’s movement.

Screenshot 2022-12-13 1.06.01 PM

Calculation:

True Range is the greatest of the following three values:

  • Difference between the current maximum and minimum (high and low)
  • Difference between the previous closing price and the current maximum
  • Difference between the previous closing price and the current minimum

Where to find the Average True Range Indicator

  1. Click File.
  2. Click Insert.
  3. From the drop-down menu, choose Indicators.
  4. You will see the Average True Range indicator.

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