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Checking market sessions…

ATR: measuring volatility and placing sensible stops

Average True Range tells you how far a bar usually travels; use it for stops, position size and targets.

What ATR is

ATR (Average True Range) was also introduced by J. Welles Wilder in 1978. True Range is the largest of: high − low, |high − previous close|, |low − previous close|. ATR is the average True Range over 14 bars. ATR does not show direction, only volatility.

On TradingViewAverage True Range (14, RMA)
ExampleGold H1 ATR = 6 USD → an H1 bar typically moves about 6 USD

How to use it

  • Stops: a stop 1.5–2 × ATR from entry helps avoid being taken out by normal noise.
  • Position size: once you know the ATR-based stop distance, use the position size tool to keep the same risk per trade.
  • Trailing: trail the stop at the highest high minus 2–3 × ATR (Chandelier Exit).
  • Timing filter: unusually low ATR often comes before a big move.
TipWhen ATR doubles, halve your size so the money at risk stays the same.
Watch outATR is in each symbol's own price units; don't compare ATR across different symbols.

Try it on a chart

Educational content only, not investment advice. Practise on a demo account before using real money.