ATR (Average True Range)
ATR (Average True Range) — A volatility indicator that measures the average price range over a fixed period (usually 14 bars).
- Quick definition: A volatility indicator that measures the average price range over a fixed period (usually 14 bars).
- Category: Indicators
Full Definition
ATR is the gold-standard tool for sizing stops dynamically. A 14-bar ATR on the H1 chart for XAUUSD might read $5 — meaning the typical hourly range is $5. Set stop-loss at 1.5× ATR ($7.50) and the stop is volatility-adjusted. ATR-based stops outperform fixed-pip stops in nearly every backtest because they adapt to changing market conditions.
Related Terms
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