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Technical Analysis

Average True Range (ATR)

An indicator that measures market volatility based on the range of price movement. Like most technical tools, it works best as part of a broader toolkit rather than as a standalone signal for trade decisions.

Meaning

What Average True Range (ATR) means

An indicator that measures market volatility based on the range of price movement. Like most technical tools, it works best as part of a broader toolkit rather than as a standalone signal for trade decisions.

Trading context

Why it matters

It's widely used to size stop-losses relative to current volatility. Traders progressing past the basics tend to lean on this more heavily as they start combining multiple concepts into a coherent trading approach.

Example

How traders may see it

Rising ATR often accompanies strong trending or news-driven moves. In practice, traders typically encounter this directly within their trading platform, charting software, or an economic calendar, depending on the specific context in which it arises.