Average True Range (ATR)
ATR measures market volatility by calculating the average of the true range over a specified period. It does not indicate direction — only the degree of price movement.
- Family
- Volatility
- Series
- Periods 14 · 7
- Best timeframes
- H1 · H4 · D1
- Last updated
- 2026-03-21
TL;DR
- ATR is a volatility indicator used in technical analysis
- Higher ATR = more volatile market. Lower ATR = quieter market. Used primarily for stop-loss placement and position sizing.
- Best timeframes: H1, H4, D1
- Skip to API docs
What is Average True Range?
ATR measures market volatility by calculating the average of the true range over a specified period. It does not indicate direction — only the degree of price movement.
How ATR is calculated
True Range = max(High-Low, |High-Close(prev)|, |Low-Close(prev)|)
ATR = SMA(True Range, n)
Available periods: 7, 14How to interpret ATR
Higher ATR = more volatile market. Lower ATR = quieter market. Used primarily for stop-loss placement and position sizing.
Trading strategies using ATR
Strategy 1: ATR-Based Stop Loss
Use ATR to set adaptive stop losses based on current volatility.
Entry rules
Enter based on other signals. Set stop loss at 1.5× to 2× ATR from entry.
Exit rules
Trail stop using 2× ATR. Adjust position size so risk = ATR × multiplier.
Combining ATR with other indicators
ATR works best when combined with complementary indicators:
- ATR + Bollinger Bands: Combine for stronger confluence signals
- ATR + Standard Deviation: Combine for stronger confluence signals
- ATR + Parabolic SAR: Combine for stronger confluence signals
ATR across different timeframes
ATR works across all 7 timeframes but performs best on H1, H4, D1 for most trading styles.
Accessing ATR via the TickAtlas API
GET https://tickatlas.com/v1/indicator
Python example
import requests
url = "https://tickatlas.com/v1/indicator"
headers = {"X-API-Key": "YOUR_API_KEY"}
params = {
"symbol": "EURUSD",
"indicator": "ATR_14",
"timeframe": "H1"
}
response = requests.get(url, headers=headers, params=params)
data = response.json()
print(data)Sample response
{
"success": true,
"data": {
"symbol": "EURUSD",
"indicator": "ATR_14",
"timeframe": "H1",
"value": 0.00082,
"updated_at": 1711548000,
"server_time": "2024-03-27T14:00:00+00:00",
"bid": 1.0856,
"ask": 1.0857
}
}Common mistakes to avoid
- Using ATR to predict price direction — it only measures volatility magnitude
- Setting fixed stop losses instead of ATR-adjusted ones
- Not adjusting position size based on ATR
Frequently asked questions
How do I use ATR for position sizing?
Calculate risk per trade as ATR × multiplier (e.g., 2× ATR). Then: Position Size = (Account Risk $) / (ATR × multiplier). This ensures each trade risks the same dollar amount regardless of volatility.
Continue learning
More volatility indicators
- Indicator
Bollinger Bands (BB)
Bollinger Bands consist of a middle SMA band with upper and lower bands at standard deviations.
Read more - Indicator
Standard Deviation (StdDev)
Standard Deviation measures the dispersion of price from its mean.
Read more - Indicator
Parabolic SAR (SAR)
The Parabolic Stop and Reverse indicator places dots above or below price to indicate potential reversal points.
Read more
Put ATR to work in your application.
Sign up with $2.50 of starting credit and query pre-calculated ATR data across 7 timeframes, from M1 to D1.