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What Is the Average True Range (ATR)

The average true range is the average, over the last fourteen days, of how far each day travelled from its high to its low — counting a gap from the previous close as travel too — given in the price's own units with no direction in it. This paper shows you gold's fourteen days to 22 April 2025 drawn from real candles and their average reach of 87 dollars, the idea as a pedometer clipped to the price, ATR in its box under the daily chart, what the word true means on a Monday that opened with a gap, and the dialog and its units on your platform.

Difficulty
Beginner
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

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Fourteen days and their reach

The average true range is a number that says how far a day has been travelling lately. Take each of the last fourteen days and measure its reach from its high to its low: for gold on 22 April 2025 that was 133 dollars, and on 15 April, 24. Average the fourteen and the answer is 87.48 dollars. That is ATR. It is given in the instrument's own units, dollars here, and there is no direction in it: a day that fell 90 and a day that rose 90 count the same.

A pedometer

The picture is a pedometer. It counts how far you walk in a day and says nothing about where you went: ten thousand steps out and back reads the same as ten thousand steps in one direction. ATR is a pedometer clipped to the price. It adds up each day's travel from its high to its low, up or down counted the same, and averages the last fourteen. On 22 April 2025 gold's read 87 dollars; on 18 July, 41. The days had grown short, and the pedometer said so.

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