← Glossary · Charts and indicators
ATR (Average True Range)
How far a price moves on a typical day, in currency or percent.
The ATR measures a price's average daily range over recent days, usually 14, including gaps. An ATR of 2 € on a 50 € share means moves of about 4 % in a day are normal.
The ATR helps place stops sensibly: a stop inside the normal daily swing is often hit for no real reason. Many investors therefore place it a multiple of the ATR below the purchase price.