Hello Deriv Community,
The ATR is an indicator that gauges the volatility of a financial asset, and tends to spike during periods of panic selling, such as when prices plummet sharply. Conversely, during periods of sideways movement or consolidation, like at the market’s peak, the ATR typically registers low values.
Interpreting the ATR follows a similar approach to other volatility indicators. Higher ATR values usually indicate a greater probability of a trend change, while lower values imply a weaker trend. Traders may use the ATR to assess market conditions and make better-informed trading decisions, often in conjunction with other analytical tools like chart patterns and other indicators, for a more comprehensive view of market activity
Calculation:
- To calculate the True Range, you need to determine the maximum value among the following three options: the difference between the current high and low prices, the difference between the previous closing price and the current high, or the difference between the previous closing price and the current low.
Where to find the Average True Range Indicator
- Click File.
- Click Insert.
- From the drop-down menu, choose Indicators.
- You will see the Average True Range indicator.
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