The indicator can help day traders confirm when they might want to initiate a trade and it can be used to determine the placement of a stop loss order.
Average true range indicator forex.
Average true range atr is a technical indicator measuring market volatility.
The average true range trading strategy will help you to achieve just that.
Average true range for a given number of periods can be calculated after calculating the true range values for all those periods.
When the market is volatile traders look for wider stops in order to avoid being stopped out of the trading by some random market noise.
How to use the atr indicator to measure stop loss placement.
The average true range indicator or the atr indicator will help you to reach this goal.
Our team at trading strategy guides will show you how to use the atr indicator to accomplish 2 things.
The popular number of periods for atr is 7 proposed by the indicator s author in his book new concepts in technical trading systems and 14 used for example in metatrader default settings.
It is typically derived from the 14 day moving average of a series of true range indicators.
The atr indicator is built into the metatrader 4 trading platform the most commonly used forex trading terminal.