Average True Range Percentage

Description average true range percent atrp expresses the average true range atr indicator as a percentage of a bar s closing price.

Average true range percentage.

Typically the atr calculation is based on 14 periods which can be intraday daily weekly or monthly. Average true range atr atr is the average of true ranges over the specified period. It is typically derived from the 14 day moving average of a series of true range indicators. To measure recent volatility use a shorter average such as 2 to 10 periods.

Moving average envelope mae moving average envelopes are lines plotted at a certain percentage above and below a moving average of price. The average true range percent is the classical atr indicator normalized to be bounded to oscillate between 0 and 100 percent of recent price variation. Atrp allows securities to be compared where atr does not. Atrp is used to measure volatility just as the average true range atr indicator is.

How this indicator works. Atr measures volatility taking into account any gaps in the price movement. The average true range formula looks as. To form the beginning the first true range value is calculated as the high minus the low.

The 14 day atr is the average of the daily true range values for the last 14 days. As is it average true range of an instrument can be easily compared to any other because of absolute percentage variation and not prices itselves. Average true range atr is a technical indicator measuring market volatility.