The **Average True Range (ATR)** is a measure of volatility developed by J. Welles Wilder and introduced in his book, *New Concepts in Technical Trading Systems* (1978). The indicator does not provide an indication of price direction or duration, simply the degree of price movement or volatility.

According to Wilder, high **ATR** values often occur at market bottoms following a “panic” sell-off. Low **Average True Range** values however are often found during extended sideways periods, such as those found at tops and after consolidation periods.

The calculation of the **Average True Range** is similar to the Average Range indicator's in that it first measures the difference between the **High** and **Low** price of the interval (the range), but the **ATR** also looks to the previous interval's price to ascertain the "true" range.

The user can set the number of previous true ranges that will be averaged to produce the average true range for a given interval.

Type in a whole number in the **Periods** text box in the **Parameters** tab of the **Average True Range Properties** dialog box.

The default number of periods is 20, this setting will use all the true ranges of the previous 20 periods and average them to produce the **Average True Range** for the current interval.

The **Average True Range** is displayed in an indicator window below the price chart.

The exact display of the plot is controlled on the **Plots** tabbed page of the **Average True Range Properties** dialog box.

The **Style** selected for the plot can be one of the following: **Solid, Dashes, Dots, Points, Histogram** or **Step**.

Once the style is selected the **Color, Weighting** and **Visibility** can also be controlled from this page.

The **Scale's** display is controlled from the **Scale Settings** and **Scale Appearance** tabbed pages.

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