Average True Range ATR XAUUSD Technical Analysis and ATR XAUUSD Signals
Developed by J. Welles Wilder
This xauusd indicator is a measure of volatility - it measures the range of gold price movement for a particular gold price period. The ATR is a directionless indicator and it does not determine the direction of the XAUUSD trend.
High ATR values
High Average True Range values indicated market bottoms after a selloff.
Low ATR values
Low Average True Range values showed extended periods of sideways gold price movement- XAUUSD 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 xauusd market and during consolidation.
This xauusd indicator is calculated using the following:
- Difference between the current high and the current low
- Difference between the previous closing gold price and the current high
- Difference between the previous closing gold price and the current low
The final Average is calculated by adding these values and calculating the average.
XAUUSD Technical Analysis and Generating XAUUSD Signals
Average True Range can be interpreted using the same principles as other volatility indicators.
Possible xauusd trend change signal - The higher the value of the indicator, the higher the probability of a xauusd trend change;
Measure of xauusd trend momentum - The lower the indicator’s value, the weaker the xauusd trend movement.