Average True Range (ATR)

Definition - What does Average True Range (ATR) mean?

Average True Range (ATR) is a technical indicator that provides traders with a gauge of market volatility. ATR measures the price movement of a currency pair in terms of the distance between the highs and lows over specific periods of time.

ForexDictionary explains Average True Range (ATR)

ATR helps traders position their stop and limit orders to allow for market volatility. The higher the Average True Range, the further out the stop or limit should be placed to avoid triggering it due simply to volatility. That is assuming that a trader is focussing on a longer term trade rather than trying to profit from the volatility itself.

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