Average True Range
A volatility indicator that measures average price movement range.
The Average True Range (ATR) measures how much price typically moves over a given period. It doesn't tell you direction — it tells you magnitude. A high ATR means the market is volatile. A low ATR means it's quiet.
Why It Matters
ATR is essential for dynamic risk management. Instead of using fixed pip values for stop losses, you can use ATR to adapt your stops to current market volatility. This means tighter stops in quiet markets and wider stops in volatile ones — keeping your risk consistent.
Settings Explained
Direction — Whether to use ATR in bullish, bearish, or both contexts.
Period — Number of candles for the ATR calculation. Standard is 14. Lower values react faster to volatility changes.
Threshold — A minimum ATR value that must be met before the signal is considered valid. Useful for filtering out low-volatility periods where breakout strategies tend to produce false signals.
Look Back Mode — How far back ATR is calculated.
Output
ATR Value — The average range in price units. This value is used by other blocks, especially Stop Loss and Take Profit, for dynamic distance calculations.
Example Use Case
You set a Stop Loss block to use ATR mode with a 1.5x multiplier. If the ATR is currently 50 pips, your stop loss is placed 75 pips away. In a volatile market where ATR jumps to 100 pips, the stop automatically widens to 150 pips. This keeps your stop proportional to market conditions.
ATR is one of the most underrated indicators. Even if you don't use it for signals, use it for position sizing and stop loss placement. It's the simplest way to make your strategy adaptive to changing market conditions.