Wilder’s Channel Using Smoothed Highs, Lows, and Average True Range

Summary

This document defines Wilder’s channel as two volatility-adjusted boundaries. The upper line adds a scaled Average True Range value to a Wilder average of highs, while the lower line subtracts the same volatility adjustment from a Wilder average of lows. Its example uses a 34-period Wilder average, a 14-period ATR, and a factor of one; these are configurable parameters rather than evidence that those settings are optimal.

The resulting lines provide a price envelope whose width responds to measured volatility. A trader could use the boundaries as reference levels for trend, range, or volatility analysis, but the document does not specify entry, exit, or position-sizing rules. It also supplies no tests, historical performance, or guidance on market selection. The remaining material concerns the website’s privacy policy and does not add trading methodology, so the indicator description is the substantive content.

Key ideas

• The channel’s upper and lower boundaries are based on Wilder averages of highs and lows.
• Average True Range expands the upper boundary and lowers the lower boundary.
• A factor scales the ATR adjustment, and the averaging periods can be configured.
• The example parameter values are illustrative and are not supported by performance evidence.
• The document does not define trading signals or risk-management rules.

Tags

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