The Average True Range (ATR) is a technical analysis indicator that measures market volatility. It calculates the average range between the high and low prices over a specific period, typically 14 days. By assessing how much a security's price fluctuates, traders can gauge the level of risk associated with that asset. ATR is useful for setting stop-loss orders and determining position sizes. A higher ATR indicates greater volatility, suggesting that prices may change significantly, while a lower ATR signals more stable price movements. This information helps traders make informed decisions based on market conditions.