ATR Calculator
Calculate Average True Range (ATR) from OHLC data. Measure market volatility.
Understanding ATR (Average True Range)
What is ATR?
Average True Range (ATR) is a volatility indicator developed by J. Welles Wilder Jr. in 1978. It measures market volatility by decomposing the entire range of an asset price for that period. ATR does not indicate price direction — only the intensity of price movement.
ATR Formula
TR = max(H-L, |H-PrevC|, |L-PrevC|)
ATR(first) = SMA(TR, N) — seed only
ATR(n) = (ATR(n-1) × (N-1) + TR(n)) / N — Wilder smoothing
ATR Applications
🎯 Stop Loss Placement
Set stop loss at 1.5-2× ATR from entry. This accounts for normal market noise while protecting against real reversals.
📊 Volatility Assessment
Rising ATR = increasing volatility (trending or breaking out). Falling ATR = decreasing volatility (consolidation or squeezing).
Frequently Asked Questions
What is ATR?
ATR (Average True Range) measures market volatility by decomposing the entire range of an asset price for that period. Higher ATR = higher volatility.
How to use ATR for trading?
ATR is commonly used to set stop-loss orders (e.g., 2x ATR below entry). It helps determine position sizing based on current volatility.
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What is this tool?
ATR (Average True Range) calculator computes the volatility indicator developed by J. Welles Wilder. ATR measures market volatility by decomposing the entire range of an asset price for that period. Higher ATR values indicate higher volatility. It is commonly used for setting stop-loss orders and position sizing in trading.
How to use
- 1
Enter high, low, close
Input the high, low, and previous close prices.
- 2
Set period
Choose the ATR calculation period (default 14).
- 3
View ATR
See the True Range and ATR value.
Frequently Asked Questions
How is ATR used in trading?
ATR is primarily used for setting stop-loss distances (e.g., 2×ATR below entry), position sizing, and gauging market volatility. It does not indicate price direction—only how much price moves on average.
What is ATR used for?
Measures market volatility. Used for stop-loss and position sizing.
What is a good ATR value?
ATR has no universal "good" value since it is expressed in the asset's price units. A $100 stock with ATR of 2 has 2% daily volatility, while a $10 stock with ATR of 1 also has 10% daily volatility. Compare ATR as a percentage of price (ATR/price × 100) to assess relative volatility. Generally, ATR/price above 3% is considered high volatility.