Studies · Volatility
Average True Range (ATR)
atr · Wilder's average true range
Drawn in its own panelReads high, low, close
Hover the chart to read values · practice data: a seeded random walk with no overnight gaps
What it measures
The average size of a bar, in price units, counting gaps. Each bar's "true range" is the widest of: high to low, high to the previous close, and low to the previous close. ATR is Wilder's smoothed average of that.
How traders use it
- Stop placement: stops are often set a multiple of ATR away from entry (for example 2 × ATR), so they sit outside normal noise.
- Position sizing: risking a fixed amount per trade means fewer shares when ATR is high.
- Volatility filter: a rising ATR means bigger bars and a more active market; it says nothing about direction.
- The building block for ATR Bands, Keltner Channels and many trailing stops.
Parameters
| Name | Value | Default | Allowed | What it does |
|---|---|---|---|---|
| period | 14 | ≥ 1 usual 5–50 | Smoothing length. Wilder used 14. |