Glossary · Pro tools

Average true range (ATR)

The average daily price range in dollars, counting gaps between days.

Why it matters

ATR measures how much a stock moves, not which way. Traders use it to set stops a sensible distance away and to size positions.

How to read it

A stop 2 ATR away is outside normal daily noise. ATR rising means the stock is getting jumpier.

Also called: ATR, true range

Related

VolatilityHow much a price swings around, usually stated as a yearly percentage.Keltner ChannelsA channel around a 20-day EMA, set by the average daily range.SuperTrendA trailing line set a few average ranges away from the price.

In the Cluenex app, this explanation opens next to every average true range (atr) figure, with the live reading for the stock you are looking at. Open it in Cluenex