Average true range

True range is a term often used to when referring to stocks and commodities trading. But what is it?

  • By Sharon Yamanaka,
  • Stocks and Commodities Magazine
  • Technical Indicators
  • Technical Indicators
  • Technical Indicators
  • Technical Indicators
  • Technical Indicators
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Trader, author, and technician J. Welles Wilder developed average true range (ATR) in the 1970s as a measurement of price volatility. Wilder believed that the range was directly proportional to volatility, and that range—the high and low of a stock for a given period, be it intraday, daily, weekly, or monthly—was indicative of a trend. If the volatility of a stock increased, it was entering a trend, and if it slowed down, it suggested a reversal.

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