Explore commonly used personal finance terms.
Average True Range (ATR) is a technical analysis indicator used in trading to measure market volatility by calculating the average range between high and low prices over a set period. Developed by J. Welles Wilder, ATR is commonly used by traders to assess the degree of price movement, aiding in setting stop-loss levels and identifying trends. A higher ATR indicates greater market volatility, while a lower ATR suggests stability. This metric provides insights for risk management and decision-making in various markets, including stocks, forex, and commodities.