Homonym: ATR (Aviation)
Average True Range (ATR) is a technical analysis indicator used to measure market volatility. It calculates the average range between the high and low prices of an asset over a specific period, typically 14 days. A higher ATR value indicates greater volatility, while a lower value suggests a more stable market.
Traders often use ATR to set stop-loss orders and determine position sizes. By understanding the volatility of an asset, they can make more informed decisions about when to enter or exit trades. ATR is commonly applied in various financial markets, including stocks, commodities, and currencies.