Black line = Trade Range from the last X periods. Red Line = 61.8% of black line value. Green bar = The current trade period range. Default Value = 21 (21 days = I business month)
Generally speaking, a stock moves approximately the same value daily. Knowing the approximate value it likes to stay within calms the nerves when you see retracement of price occuring.
IE. Price average = 1.00 in a day. It move .75 within first hour then retraces in the opposite direction. There are still hours left in the trade day, so it is trading in its value range in order to not over extend itself.
This differs in calculation from the Wells Wilder version as it smooths out jumps and only examines the ranges between high and low.
Hello @priceprophet, I have been using this indicator for about two years now, and I think it's great. It's been fantastic to use it as a stop loss measurement system. Is there any new update with this indicator?
pw97787
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Awesome indicator. How do you use this alongside ATRx?
priceprophet
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@pw97787, The ATRx tells me how many of the True ATR ranges prices are away from the mean. With a distance of 3 ATRs and greater being a "danger" zone that will generally signal a possible stall/return to the mean.
The True ATR gives me a guage of approximately how much movement is left in the day (if trading does not increase in volatility).