Average True Range Adjusted

Average True Range Adjusted (ADJATR) is a modified version of the ATR study, where it only uses the closing prices. ​The user chooses the number of days for the calculation. The calculation is highly correlated to the normal ATR, an indicator that shows volatility of the market.

Average True Range can often reach a high value at the bottom of the market after a sheer fall in prices occasioned by panic selling. Low values of the indicator are typical for the periods of sideways movement of long duration which happen at the top of the market and during consolidation. Average True Range can be interpreted according to the same principles as other volatility indicators. The principle of forecasting based on this indicator can be worded the following way: the higher the value of the indicator, the higher the probability of a trend change; the lower the indicator’s value, the weaker the trend’s movement is.