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ATR (Average true range) FOREX indicator

One of the most progressive technical trader J.W.wilder, developed ATR to measure futures volatility. When applied on forex, ATR can help technical trader to increase profitability of his forex trading strategy.

ATR (Average true range) FOREX indicator

Anatomy of Average true range forex (ATR) forex indicator

Volatility is difference between high and low of price in a chosen time period. Wilder designed this forex indicator based on observation, that on market, periods of low volatility are followed by periods of high volatility . By comparing current volatility to the average of previous candles (10 day candles by default) we can effectively enter the market at breakouts.

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ATR is based on exponential moving average (14) applied on true range. As such it gives fewer and more accurate signals.

ATR calculation:

  • TrueRange = Current High – Current Low

  • TrueRange = Current High – Previous candle close

  • TruRange = Previous candle close – Current low

Using Average true range forex (ATR) forex indicator

ATR (Average true range) FOREX indicator

Calculating market volatility on candle. ATR works best on daily range (candle), however it can be also used on lower timeframes. ATR forex indicator is very useful in anticipating and reacting to marketbreakouts. To be able to compare heightened volatility of breakout to previous data, we can apply moving averages to ATR window.



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Only in 2016 - 2017 we have created more than 400 forex strategies. During this period we have also developed and published +200 MT4 Expert advisors based on those strategies. We are dedicated to provide you with viable and complete trading systems that have thrived in extensive historical testing. We want to give you complete and transparent trading solutions, that once mastered ,will set you financially free. We want to give you a fighting and winning chance in the market. ” 

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