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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives
SPY 691.72-0.1%Jan 16 4:00 PM EST

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To: robert b furman who wrote (36664)8/20/2012 11:03:48 AM
From: Challo Jeregy  Read Replies (1) of 221972
 
Robert, from investopedia.com -

Definition of 'Average True Range - ATR'A measure of volatility introduced by Welles Wilder in his book: New Concepts in Technical Trading Systems.

The true range indicator is the greatest of the following:
-current high less the current low.
-the absolute value of the current high less the previous close.
-the absolute value of the current low less the previous close.

The average true range is a moving average (generally 14-days) of the true ranges.

Investopedia explains 'Average True Range - ATR'Wilder originally developed the ATR for commodities but the indicator can also be used for stocks and indexes. Simply put, a stock experiencing a high level of volatility will have a higher ATR, and a low volatility stock will have a lower ATR.

investopedia.com

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from wikipedia.

The range of a day's trading is simply . The true range extends it to yesterday's closing price if it was outside of today's range.

The true range is the largest of the:

Most recent period's high minus the most recent period's lowAbsolute value of the most recent period's high minus the previous closeAbsolute value of the most recent period's low minus the previous closeThe idea of ranges is that they show the commitment or enthusiasm of traders. Large or increasing ranges suggest traders prepared to continue to bid up or sell down a stock through the course of the day. Decreasing range suggests waning interest.

en.wikipedia.org
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