ATR Commodity Trading Technical Analysis & ATR Trading Signals

Created by J. Welles Wilder

This commodity technical indicator is a measure of volatility - it measures the range of commodity price movement for a particular commodity price period. The ATR is a directionless indicator & it does not determine the direction of the Commodity Trading trend.

High ATR values

High Average True Range indicator values indicated market bottoms after a sell off.

Low ATR values

Low Average True Range values showed extended periods of sideways commodity price movement- Commodity Trading Price Range, such as those found at market tops and consolidation periods. Low ATR values are typical for the periods of sideways movement of long duration which happen at the top of the commodities trading market and during consolidation.

Calculation

This commodity technical technical indicator is calculated using the following:

• Difference between the current high & the current low

• Difference between the previous closing commodity price and the current high

• Difference between the previous closing commodity price and the current low

The final Average is calculated by adding these values & calculating the average.

Commodities Trading Technical Analysis & How to Generate Trading Signals

Average True Range technical indicator can be interpreted using the same principles as other volatility technical indicators.

Possible commodity trend change signal - The higher the value of technical indicator, the higher the probability of a commodity trend change;

Measure of commodity trend momentum - The lower the indicator’s value, the weaker the commodity trend movement.

Technical Analysis in Commodities Trading