Indicators
ATR (Average True Range)
Measures market volatility by averaging price ranges.
Full Definition
Average True Range (ATR) is a volatility indicator that shows how much an asset typically moves over a given period. It calculates the average of true ranges, which account for gaps. ATR helps with position sizing and stop loss placement. Higher ATR means more volatile conditions requiring wider stops or smaller position sizes.
Example
If EUR/USD has a 14-period ATR of 80 pips, you might set your stop loss at 1.5× ATR (120 pips) to avoid getting stopped out by normal price fluctuation.
Formula
ATR = Average of True Ranges over N periodsRelated Terms
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