Average True Range Indicator Forex

How to use the atr indicator to measure stop loss placement.

Average true range indicator forex.

Average true range atr is a technical indicator measuring market volatility. To activate the mt4 atr indicator you should simply go to insert indicators and choose average true range. The atr indicator is built into the metatrader 4 trading platform the most commonly used forex trading terminal. Forex traders use average true range indicator to determine the best position for their trading stop orders such stops that with a help of atr would correspond to the most actual market volatility.

The popular number of periods for atr is 7 proposed by the indicator s author in his book new concepts in technical trading systems and 14 used for example in metatrader default settings. The average true range trading strategy will help you to achieve just that. It is typically derived from the 14 day moving average of a series of true range indicators. Our team at trading strategy guides will show you how to use the atr indicator to accomplish 2 things.

When the market is volatile traders look for wider stops in order to avoid being stopped out of the trading by some random market noise. The indicator can help day traders confirm when they might want to initiate a trade and it can be used to determine the placement of a stop loss order.