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Average True Range (ATR)

What is ATR?​

Average True Range (ATR) is a volatility indicator introduced by J. Welles Wilder. It measures how much an asset typically moves within a given period by averaging the "True Range" of recent candles.

ATR helps traders understand market volatility, identify stop-loss levels, and determine position sizing based on how aggressively price is moving.

The ATR does not indicate direction,only the magnitude of movement.

How to Add ATR?​

  1. Click on the "+" button in the Indicators section.
  2. Select ATR (Average True Range).
  3. Choose the data source containing OHLC values.
  4. Configure the Length, Time Frame.
  5. Click "Add" to save the indicator.

Configurable Parameters in ATR​

1. On Data (Source Selection)​

  • ATR requires OHLC candle data because it uses High, Low, and Close values.
  • If you have multiple candle datasets, choose the one you want ATR to use.
  • If not selected, ATR is automatically applied on the main Candle Data.

2. Time Frame​

  • Defines the timeframe used to calculate ATR.
  • Example: If set to 15, ATR will be calculated on 15-minute candle data.

3. Length​

  • Determines how many periods ATR uses for averaging volatility.
  • The widely used standard is 14 periods.

When Length is Set Very Low (e.g., 2)​

In simple, universal language:

  • Smaller length makes ATR extremely sensitive.
  • ATR begins reacting to only the last few candles, rather than overall volatility.
  • With a length of 2, ATR is basically asking: “How much did the market move in just the last couple of candles?”
  • This creates fast but noisy volatility readings.

In short: shorter length = faster reaction, more noise, less smoothing.

Applying ATR on Other Candle Types​

ATR can be applied to any candle dataset that includes OHLC values.

Example

You can calculate ATR using Heikin-Ashi, Range Bars, or any custom OHLC series to measure volatility of transformed candles.

Element Name​

Each ATR indicator is assigned a unique Element Name, making it easy to reference in conditions, actions, and strategy logic.

Use Cases for ATR​

  • Volatility Measurement
    → Helps determine whether the market is stable or expanding.

  • Stop-Loss Placement
    → ATR-based SL adapts to volatility (e.g., 1× ATR, 2× ATR).

  • Trend Strength Analysis
    → Rising ATR often accompanies strong moves.

  • Position Sizing
    → Traders use ATR to adjust risk based on expected movement.

Next Steps​

✅ Add ATR to your strategy
✅ Use ATR for volatility-based stops
✅ Combine ATR with Supertrend, EMA, or Fractals
✅ Use ATR values in Conditions & Actions