Average True Range (ATR)
The typical daily price range, including overnight gaps.
Formula
True range = max(High − Low, |High − Prior close|, |Low − Prior close|)
How to read it
ATR % divides it by the price, so ranges of different stocks compare. Traders size stops and positions from it.
How to use it
Size stops and positions to each stock's own movement: a stop of 2 ATRs means the same thing on a quiet stock and a wild one.
Limitations
Says nothing about direction.
In Kereon
Investing · price record. Wilder's 14-session smoothing of the true range; ATR % is that ÷ the last price.
Market. A 14-day Wilder-style average of true range on daily bars; ATR % divides it by the last price.
Charts · Superchart. Wilder-smoothed (RMA) over 14 bars by default — the smoothing can be switched to another average of the same true range. ATR % divides by the close.
Also called: atr, atr 14, atr14, average true range, atr %, atrp, natr, atr percent.