Average True Range (ATR) Indicator Explained in under 7 Mins | The Best MARKET VOLATILITY Indicator
307 بار بازدید -
7 ماه پیش
-
The Average True Range (ATR)
The Average True Range (ATR) indicator is a volatility-based technical analysis tool developed by J. Welles Wilder. ATR measures market volatility by calculating the average range between a security's high and low prices over a specific period.
Welcome to our comprehensive guide to the ATR Indicator! In this quick and informative tutorial, we break down the complexities of this indicator in under 7 minutes. Whether you're a seasoned trader looking to refresh your knowledge or a newcomer to the world of technical analysis, this tutorial is designed to provide a clear understanding of how the ATR works and how to use it effectively in your trading strategies.
Tool Used to explain: https://bit.ly/strike_utubevid (Get Started for FREE)
0:00 Introduction to ATR
0:20 What is Average True Range (ATR) Indicator
0:50 Average True Range Formula
01:50 Setting Stop Loss/Target Levels with ATR
03:00 Use of ATR within the Rohit Setup Screen
04:26 ATR Used as a Base in Calculation of Super Trend
05:09 How to use the ATR Indicator on Strike
05:22 What is Bullish & Bearish ATR Signal
06:46 Conclusion
The ATR is not a directional indicator; rather, it quantifies volatility. It calculates the average trading range, accounting for gaps and limit moves that might affect price movement. The ATR is typically computed over a default period of 14 days, but this period can be adjusted to suit different trading styles and timeframes. The formula involves finding the average of true ranges, which are the greater of:
1. The current high minus the current low.
2. The absolute value of the current high minus the previous close.
3. The absolute value of the current low minus the previous close.
Significance and Importance:
ATR is significant because it provides insights into the market's volatility, allowing traders to adjust their strategies based on the current market conditions. Higher ATR values indicate increased volatility, while lower values suggest decreased volatility. This information is crucial for setting stop-loss levels, determining position sizes, and identifying potential breakout or breakdown levels in the market.
How to Use ATR:
Volatility Measurement: ATR helps traders gauge the average range of price movement for a given period. Higher ATR values indicate wider price ranges, suggesting higher volatility.
Setting Stop-Loss Levels: ATR can assist in setting stop-loss orders by adjusting them based on current market volatility. ATR values can be used to place stops beyond normal price fluctuations.
Position Sizing: Traders can use ATR to adjust their position sizes based on volatility. In high-volatility markets, smaller positions might be appropriate to manage risk.
Identifying Breakouts: ATR can be used to identify potential breakout levels. When ATR values increase significantly, it might indicate an impending breakout or increased momentum in a specific direction.
Developed By:
The Average True Range (ATR) indicator was developed by J. Welles Wilder, a prominent technical analyst and creator of several other well-known indicators like the Relative Strength Index (RSI), Parabolic SAR, and the Average Directional Index (ADX). Wilder's contributions significantly influenced technical analysis, providing traders with tools to assess market conditions and make informed decisions.
In summary, the Average True Range (ATR) is a vital tool for traders, providing a measure of market volatility and aiding in risk management and trade decision-making by offering insights into potential price movements. Its versatility makes it valuable across various trading strategies and timeframes.
Join us as we simplify this powerful tool, making it accessible and easy to grasp, empowering you to make more informed trading decisions. Hit play and gain valuable insights into one of the most popular indicators in the financial markets.
Don't forget to like, subscribe, and hit the notification bell to stay updated with our latest content on trading strategies and market analysis!
✅Supercharge Your Stock Trading. Get Started for FREE: https://bit.ly/strike_utubevid
🎬 Subscribe to our channel for actionable stock market updates: @strike-ic
🌏Stay Tuned for Regular Updates:
Twitter: Twitter: strike_ic
Facebook: Facebook: strikeanalytic
LinkedIn: LinkedIn: strike-ic
Instagram: Instagram: strike_ic
Telegram: https://t.me/strikeanalytics
#ATR #tradingstrategy #strike #stockmarketanalysis #stockmarket #technicalanalysis #fundamentalanalysis #dailystockmarket #stockupdates
Strike - Supercharge Your Stock Trading | Mere Paas Data Hai
💻 https://www.strike.money/
Trading in any financial market should be done with sound knowledge and the help of a qualified investment adviser. This is not a recommendation to buy/sell. It is our endeavor to educate viewers on the use of these models and how markets work using our models.
Welcome to our comprehensive guide to the ATR Indicator! In this quick and informative tutorial, we break down the complexities of this indicator in under 7 minutes. Whether you're a seasoned trader looking to refresh your knowledge or a newcomer to the world of technical analysis, this tutorial is designed to provide a clear understanding of how the ATR works and how to use it effectively in your trading strategies.
Tool Used to explain: https://bit.ly/strike_utubevid (Get Started for FREE)
0:00 Introduction to ATR
0:20 What is Average True Range (ATR) Indicator
0:50 Average True Range Formula
01:50 Setting Stop Loss/Target Levels with ATR
03:00 Use of ATR within the Rohit Setup Screen
04:26 ATR Used as a Base in Calculation of Super Trend
05:09 How to use the ATR Indicator on Strike
05:22 What is Bullish & Bearish ATR Signal
06:46 Conclusion
The ATR is not a directional indicator; rather, it quantifies volatility. It calculates the average trading range, accounting for gaps and limit moves that might affect price movement. The ATR is typically computed over a default period of 14 days, but this period can be adjusted to suit different trading styles and timeframes. The formula involves finding the average of true ranges, which are the greater of:
1. The current high minus the current low.
2. The absolute value of the current high minus the previous close.
3. The absolute value of the current low minus the previous close.
Significance and Importance:
ATR is significant because it provides insights into the market's volatility, allowing traders to adjust their strategies based on the current market conditions. Higher ATR values indicate increased volatility, while lower values suggest decreased volatility. This information is crucial for setting stop-loss levels, determining position sizes, and identifying potential breakout or breakdown levels in the market.
How to Use ATR:
Volatility Measurement: ATR helps traders gauge the average range of price movement for a given period. Higher ATR values indicate wider price ranges, suggesting higher volatility.
Setting Stop-Loss Levels: ATR can assist in setting stop-loss orders by adjusting them based on current market volatility. ATR values can be used to place stops beyond normal price fluctuations.
Position Sizing: Traders can use ATR to adjust their position sizes based on volatility. In high-volatility markets, smaller positions might be appropriate to manage risk.
Identifying Breakouts: ATR can be used to identify potential breakout levels. When ATR values increase significantly, it might indicate an impending breakout or increased momentum in a specific direction.
Developed By:
The Average True Range (ATR) indicator was developed by J. Welles Wilder, a prominent technical analyst and creator of several other well-known indicators like the Relative Strength Index (RSI), Parabolic SAR, and the Average Directional Index (ADX). Wilder's contributions significantly influenced technical analysis, providing traders with tools to assess market conditions and make informed decisions.
In summary, the Average True Range (ATR) is a vital tool for traders, providing a measure of market volatility and aiding in risk management and trade decision-making by offering insights into potential price movements. Its versatility makes it valuable across various trading strategies and timeframes.
Join us as we simplify this powerful tool, making it accessible and easy to grasp, empowering you to make more informed trading decisions. Hit play and gain valuable insights into one of the most popular indicators in the financial markets.
Don't forget to like, subscribe, and hit the notification bell to stay updated with our latest content on trading strategies and market analysis!
✅Supercharge Your Stock Trading. Get Started for FREE: https://bit.ly/strike_utubevid
🎬 Subscribe to our channel for actionable stock market updates: @strike-ic
🌏Stay Tuned for Regular Updates:
Twitter: Twitter: strike_ic
Facebook: Facebook: strikeanalytic
LinkedIn: LinkedIn: strike-ic
Instagram: Instagram: strike_ic
Telegram: https://t.me/strikeanalytics
#ATR #tradingstrategy #strike #stockmarketanalysis #stockmarket #technicalanalysis #fundamentalanalysis #dailystockmarket #stockupdates
Strike - Supercharge Your Stock Trading | Mere Paas Data Hai
💻 https://www.strike.money/
Trading in any financial market should be done with sound knowledge and the help of a qualified investment adviser. This is not a recommendation to buy/sell. It is our endeavor to educate viewers on the use of these models and how markets work using our models.
7 ماه پیش
در تاریخ 1402/10/06 منتشر شده
است.
307
بـار بازدید شده