How to Measure Volatility
3. Average True Range (ATR)
Last on the list is the ATR.
The ATR is an excellent tool for measuring volatility
because it tells us the average trading range of the market for X amount of
time, where X is whatever you want it to be.
So if you set ATR to 20 on a daily chart, it would show you
the average trading range for the past 20
days.
Use ATR to measure price volatility.
When ATR is falling, it is an indication that volatility is
decreasing. When ATR is rising, it is an indication that volatility has been on
the rise.
Well right,
ReplyDeleteI also use ATR in my trades and agree with you.
The lower The ATR, the lower the volatility is.
Keep posting.
Eklogite