Smoothed ATR Histogram for Tracking Volatility Changes

Summary

The Oscillator Average Average True Range (AATR) indicator displays a smoothed Average True Range as a colored histogram. It calculates standard ATR over a configurable ATR period, then applies a simple moving average using a separately configurable smoothing period. The resulting values are colored green when they rise and red when they fall, making changes in smoothed volatility easier to see at a glance.

The document describes the calculation and its two adjustable periods, but provides no trading rules, chart examples, performance results, or guidance on parameter selection. Because ATR measures price range rather than direction, the histogram indicates changes in volatility, not whether price is moving up or down. The indicator may help monitor volatility conditions, though its practical value and interpretation would need to be evaluated in the intended market and timeframe.

Key ideas

• AATR applies a simple moving average to standard ATR values.
• The ATR period controls the range calculation, while the smoothing period controls the subsequent averaging.
• The histogram uses green for rising values and red for falling values.
• The indicator tracks volatility changes and does not directly signal price direction.
• No strategy tests or parameter recommendations are included.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.