What Is the ATR Indicator? How Traders Measure Market Volatility
The Average True Range (ATR) is a volatility indicator that shows how much an instrument’s price typically moves over a set number of periods, usually 14. It is measured in price units, such as pips or dollars, and says nothing about direction. Traders use the ATR to judge current volatility, set stop distances and size positions, but it reacts to past moves and cannot forecast sudden spikes.