ATR Percent: Scaling Average True Range by Price
Summary
ATR Percent expresses the Average True Range as a percentage of the current closing price. The underlying ATR summarizes the average true range over a chosen period, accounting for gaps as well as the distance between daily highs and lows. Dividing ATR by the close and multiplying by 100 scales the measure relative to the asset's price, making it easier to compare volatility across assets or price levels.
The document characterizes 100% as the indicator's maximum possible volatility and gives rough typical ranges for junior and senior timeframes, but does not explain how those ranges were derived. ATR Percent describes historical price movement; it does not indicate direction or guarantee future volatility. The source is a brief translated indicator description and provides no calculation settings, empirical evaluation, or trading rules for using the measure.
Key ideas
- ATR Percent divides Average True Range by the current closing price and expresses the result as a percentage.
- Average True Range incorporates price gaps as well as the high-to-low range.
- Scaling ATR by price supports comparisons across assets with different price levels.
- The indicator measures volatility rather than price direction, and the document offers no trading evaluation.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.