Average True Range - ATR MetaTrader 4 Indicator & ATR Forex Trade Signals

Developed by J. Welles Wilder

This MT4 Indicator is a measure of volatility - it measures the range of price movement for a particular price period. The ATR is a directionless MetaTrader 4 Indicator & it does not determine the direction of the Forex trend.

High ATR values

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

Low ATR values

Low Average True Range values showed extended periods of sideways price movement- 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 market and during consolidation.

Calculation

This MT4 Indicator is calculated using the following:

• Difference between the current high & the current low

• Difference between the previous closing price & the current high

• Difference between the previous closing price and the current low

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

MetaTrader 4 Indicator & Generating Signals

Average True Range can be interpreted using the same principles as other volatility MetaTrader 4 Indicators.

Possible trend change signal - The higher the value of the MetaTrader 4 Indicator, the higher the probability of a trend change;

Measure of trend momentum - The lower the MetaTrader 4 Indicator’s value, the weaker the trend movement.

MetaTrader 4 Technical Indicator