Technical Analysis
Technical Indicators
Oscillators
Average True Range
Average True Range Technical Indicator (ATR)
Average True Range Technical Indicator (ATR) is an
indicator that shows volatility of the market. It was introduced by
Welles Wilder in his book "New concepts in technical trading systems".
This indicator has been used as a component of numerous other
indicators and trading systems ever since.
Average True Range can often reach a high value at
the bottom of the market after a sheer fall in prices occasioned by
panic selling. Low values of the indicator are typical for the periods
of sideways movement of long duration which happen at the top of the
market and during consolidation. Average True Range can be interpreted
according to the same principles as other volatility indicators. The
principle of forecasting based on this indicator can be worded the
following way: the higher the value of the indicator, the higher the
probability of a trend change; the lower the indicator’s value, the
weaker the trend’s movement is.
Calculation:
True Range is the greatest of the following three values:

difference between the current maximum and minimum (high and low);

difference between the previous closing price and the current maximum;

difference between the previous closing price and the current minimum.
The indicator of Average True Range is a moving average of values of the true range.
Source Code
Full MQL4 source of Average True Range is available in the Code Base: Average True Range

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