| Average True Range | |
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Also referred to as the Trading Range, this system was
introduced by J. Welles Wilder Jr. in his book "New Concepts in
Technical Trading Systems." Wilder has found that high Average True Range values
often occur at market bottoms following a "panic" sell-off. Low
Average True Range values are often found during extended
sideways periods, such as those found at tops and after
consolidation periods.
The True Range indicator is the greatest of the following:
The Average True Range is a moving average (typically 7-days) of
the True Ranges.