Average True Range (ATR)
A technical indicator invented by J. Welles Wilder and used by technical analysts as a measure of volatility or risk. The level of the Average True Range (ATR) indicator is computed by calculating the 14-day moving average of the highest of: (1) the current high minus the current low, (2) the absolute value of the current low minus the former close, or (3) the absolute value of the current high minus the former close. Forex traders might use the ATR to help them assess the risk involved in trading a particular currency pair.
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