Wilder’s ATR Uses Smoothed Averaging and a Seven-Period Default

Summary

The document describes an implementation of John Welles Wilder Jr.’s Average True Range indicator. Its distinguishing choices are the use of Wilder’s smoothed moving average, also called SMMA, and a default lookback of seven periods, following the settings attributed to Wilder’s book. These settings differ from the simple moving average and fourteen-period default cited for MetaTrader’s built-in ATR.

ATR is a technical indicator used to represent market range and volatility; the document focuses on how this version’s smoothing and period differ from another common implementation. Those choices affect the indicator values, so results may not match platforms using other defaults or averaging methods. The text provides no formula details, performance tests, trading rules, or evidence that one configuration is more profitable. It also notes that the source supports compilation in both MQL4 and MQL5, which is an implementation detail rather than a claim about trading effectiveness.

Key ideas

• This ATR implementation follows Wilder’s original approach as described in his book.
• It uses a smoothed moving average instead of a simple moving average.
• Its default period is seven rather than the fourteen-period default attributed to MetaTrader’s built-in indicator.
• Different smoothing methods and periods can produce different ATR readings.
• The document gives implementation details but no strategy results or evidence of superior performance.

Tags

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