The ATR indicator is used to measure market volatility. This indicator is not used to determine the direction of the market. Different from the ATR indicator, the average price range indicator also pays attention to price gaps and restricted fluctuations. This indicator has a great advantage in determining interest in market movements, since large swings and reversals are accompanied by large amplitudes
ATR Calculation
The ATR indicator is the moving average of a certain time period, usually the 14-day moving average. The value of the ATR indicator is the highest value of the following values:
1- The distance between today’s highest and lowest values for the day.
2- The distance between the highest and lowest value of the previous day.
3- The distance between the previous day’s closing price and the day’s lowest value.