Average True range indicator

Assalam alaikum dear members!
umeed ha aap sb khair khairiat se hn gy or apka last trading week bahut acha gaya ho ga or dua ha k apka next trading week bhi acha jy.
dear members trading itni asaan ha ni jtna hum esko smjhty hain or esi waja se hamen loss hota ha agr hm market ko smjh kr trade karen to hmary successful hony k chances zada hn.
market main 2 chezen important hain aik to price action jo k market ki apni movement hoti ha jb k 2nd indicators hoty hain jo k trading main help karty hain.
aj hum aik important indicator ko es post main study karen gy jo k Average True Range indicator khlata ha.

What is Average True Range?

Dear members average true range aik technical indicator ha jo k market main volatility ko measure karta ha.
ye indicator trading pair ki prices ko time periods main decompose kr k volatility btata ha.
Basically ye aik moving average hoti ha jo k 14 periods ki true range ko use karti ha es lye esko averaeg true range kaha jata ha.




How to use average true range?

Dear members average true range hamen market main srf volatility k bary main btata ha ye market k trend ya direction k bary main kch n btata.
esko tradinh main vlatility find karny k lye use kia ja skta ha jesa k es k 2 levels hoty hain nechy ki trf 0-20 ka level ha jb k opr ki trf 80-100 ka level ha.
agr ATR in dono main se ksi level ko touch karta ha to ye hamen indicate krta ha. Jesa k 0-20 ka levwl low vlatility ka level ha or es main trade na ki jy.
jb k 80-100 ka level high volatility ka level ha or es main trades leny ka kaha jata ha.



or beech main 50 ka level hota ha agr ATR 50 se above ho to ye normal volatility ko indicate karta ha jb k 50 se nechy low volatility hoti ha.


Limitations of ATR?

Dear members jesa k ye indicator srf volatility measure karta ha or market k trend or direction k bary main koe information n deta to baz oqat ho skta ha market ka trend reverse hony wala ho or market main volatility aa jy jb k user ye smjh skta ha k old trend main volatility ai ha or wo accordingly trade kar skta ha to usy loss ho ga.

Re: Average True range indicator

INTRODUCTION :




Hello friends kasa ho ap sab umeed ha ap sab thek ho ga or ap ke trading achi horahe ho ge or ap log trading karka acha profit bhi hasil kar raha ho ga or mara kuch dost abhi abhi trading start kar raha ho ga jin ko trading ka bara ma abhi kuch bhi ni pata ho ga par aj ma apna inin dosto ka sath forex trading ka kuch point share karo ga jin ko samjna ap sab ka liyaliya zarori ha q ka ya market or trading ma ak kas ahmet rakhta ha. Jo aj ka hamara topic ha os ka name average true range ha. Agar ap na aj ka topic sai sa samaj liya toto mujha yaken ha ka ap ko trading ma kuch na kuch profit zaror ho ga to isis liya aj ka topic mara sab dosto ka liya kas hona walawala ha jo dost new ha trading ma or jo mara dost kafi time sa kar raha ha trading.







WHAT IS AVERAGE TRUE RANGE:






Dosto average true range ak technical indecator ha is ko welles wilder na banya ha is ka bara ma onho na apni ak book ma bhi likha ha. Ya ak new tareka tha market ko samajna ka is pattern ko phalay koi bhi ni janta tha or ne he koi is par kam karta tha.ya indecator market ko uper sa yani jab market top par chal rahe ho to ya os ko uper sa otha kar nitcha la ata ha. Is ma market ke price ya value jo uper chal rahe hote ha ya pattern os ko nitcha la ata ha os ke phalay wala price par. Ya pattern market ko nitcha lana ma 14 din tak laga data ha is pattern ma huma ak long time trade lagani parte ha.






HOW TO CALCULATE AVERAGE TRUE RANGE:





Dosto ya pattern huma 14 days ka pattern ka bara ma batata ha yani ya pattern 14 din rahta ha is liya ap is pattern ma 14 days kam kar sakta ha is pattern ma traders 5 din average true range indecator ko use karta ha or apna ak acha profit hasil kar lata ha. Is pattern ko asa jana jata ha ka ya pattern ak high point sa is ka low ke traf ata ha. Is average true range pattern ke calculation hum 5 din ma kar lata ha ya hama 5 din ma bata data ha ka ab is pattern ka trend kis taraf ho ga jisa traders bahot he pasand karta ha. Or hum 5 din ma is pattern ma 5 values find kar lata ha.






WHAT DOES THE AVERAGE TRUE RANGE TELL YOU :




Ya pattern wilder name ka banda na banaya tba ya pattern huma batat ha stock and indics ka bara ma. Yani ya huma bata ha ka jab ya pattern high par ho to is ke average true range bhi high ho ge jab ya pattern low par ho ga tab tab average true range bhi low par ho ge. Ya average true range is liya use hota ha taka hum market ko technical analys kar saka or market ma trade enter or close kar saka. Or ya ak bahot he kam ka tool ka tor par bhi market ma trading ka liya use kiya jata ha.







THE AVERAGE TRUE RANGE FORMULA :



Agar hum chata ha ka average true range ko calculate kara to is ka phalay step ya ho ga ka range value ko tlas kiya jay is ke price value ko tlash asa kiya jay ga ka jab ya high sa low par ay ge os waqat is ke value ko find kiya jay ga.

TR=Max[(H − L),Abs(H − C P),Abs(L − CP )]
ATR=( n1 ) (i=1)∑(n)TR i
where:TR i=A particular true rangen=The time period employed

Re: Average True range indicator

Asalaam alaikum forex members aaj ka Hamara topic average true range indicators a related hai

Definition of average true range indicator:

The average true range (ATR) is a market volatility indicated used in technical analysis. It is typically derived from the 14-day simple moving average of a series of true range indicators. The ATR was originally developed for use in commodities markets but has since been applied to all types of securities.

Explanation:

average true range Ek technical indicator hai jo ke market Mein volatility ko Maihar Karta Hai yah indicated trading pair ki prices ko time periods Mein decompose Karke batata Hai basically Ye moving average hoti hai jo ke 14 periods ke through range ko use karti hai isliye isko average through range Kaha jata hai.

How to calculate average to range indicator:

yah pattern Hamen 14 days ka pattern ke bare mein batata Hai yani yah pattern 14 din rahata hai isliye aap is pattern Mein 14 days kam kar sakte hain is pattern Mein traders Panch Din average through range indicator ko use karte hain aur Apna Ek Achcha profit Hasil kar lete hain is pattern ko Aise Jana jata hai ki yah pattern Ek high point se iska Lo Ki Taraf aata hai is average pattern ko calculation Mein 5 Din Mein kar lete hain aur 5 Din Mein batata Hai Ki Ab is pattern ka trend kis Taraf Hoga jisse trader bahut jyada Achcha profit Hasil kar sakte hain

How do you find the average true range:

The sequential ATR value could be estimated by multiplying the previous value of the ATR by the number of days less one, and then adding the true range for the current period to the product. Next, divide the sum by the selected timeframe.

Re: Average True range indicator

What Is the Average True Range (ATR)?

The average true range (ATR) is a technical analysis indicator, introduced by market technician J. Welles Wilder Jr. in his book New Concepts in Technical Trading Systems, that measures market volatility by decomposing the entire range of an asset price for that period.1

The true range indicator is taken as the greatest of the following: current high less the current low; the absolute value of the current high less the previous close; and the absolute value of the current low less the previous close. The ATR is then a moving average, generally using 14 days, of the true ranges.

KEY TAKEAWAYS

• The average true range (ATR) is a market volatility indicator used in technical analysis.
• It is typically derived from the 14-day simple moving average of a series of true range indicators.
• The ATR was originally developed for use in commodities markets but has since been applied to all types of securities.

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Calculating Volatility with Average True Range

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The Average True Range (ATR) Formula

The first step in calculating ATR is to find a series of true range values for a security. The price range of an asset for a given trading day is simply its high minus its low. Meanwhile, the true range is more encompassing and is defined as:

\begin{aligned} &TR = \text{Max}[(H\ -\ L), \text{Abs}(H\ -\ C_P),\text{Abs}(L\ -\ C_P)]\\ &ATR=\bigg(\frac1n\bigg)\sum\limits^{(n)}_{(i=1)}T R_i\\ &\textbf{where:}\\ &TR_i=\text{A particular true range}\\ &n=\text{The time period employed} \end{aligned}

TR=Max[(H − L),Abs(H − CP),Abs(L − CP)]ATR=(

n
1

)

(i=1)∑(n)

TRiwhere:TRi=A particular true rangen=The time period employed
How to Calculate the Average True Range (ATR)

Traders can use shorter periods than 14 days to generate more while longer periods have a higher probability to generate fewer trading signals.

For example, assume a short-te only wishes to analyze the of a stock over a period of five trading days. Therefore, the trader could calculate the five-day ATR. Assuming the historical price data is arranged in reverse chronological order, the trader finds the maximum of the absolute value of the current high minus the current low, the absolute value of the current high minus the previous close, and the absolute value of the current low minus the previous close. These calculations of the true range are done for the five most recent trading days and are then averaged to calculate the first value of the five-day ATR.





What Does the Average True Range (ATR) Tell You?

Wilder originally developed the ATR for although the indicator can also be used for stocks and indices.1 Simply put, a stock experiencing a high level of volatility has a higher ATR, and a low volatility stock has a lower ATR.

The ATR may be used by to enter and exit trades, and is a useful tool to add to a trading system. It was created to allow traders to more accurately measure the daily volatility of an asset by using simple calculations. The indicator does not indicate the price direction; rather it is used primarily to measure volatility caused by gaps and limit up or down moves. The ATR is fairly simple to calculate and only needs historical price data.

The ATR is commonly used as an exit method that can be applied no matter how the entry decision is made. One popular technique is known as the "chandelier exit" and was developed by Chuck LeBeau. The chandelier exit places a under the highest high the stock reached since you entered the trade. The distance between the highest high and the stop level is defined as some multiple times the ATR For example, we can subtract three times the value of the ATR from the highest high since we entered the trade.





The ATR can also give a trader an indication of what size trade to put on markets. It is possible to use the ATR approach to position sizing that accounts for an individual trader's own willingness to accept risk as well as the volatility of the underlying market.

Example of How to Use the Average True Range (ATR)

As a hypothetical example, assume the first value of the five-day ATR is calculated at 1.41 and the sixth day has a true range of 1.09. The sequential ATR value could be estimated by multiplying the previous value of the ATR by the number of days less one, and then adding the true range for the current period to the product.

Next, divide the sum by the selected timeframe. For example, the second value of the ATR is estimated to be 1.35, or (1.41 * (5 - 1) + (1.09)) / 5. The formula could then be repeated over the entire time period.

While the ATR doesn't tell us in which direction the breakout will occur, it can be added to closing price and the trader can buy whenever the next day's price trades above that value. This idea is shown below. Trading signals occur relatively infrequently, but usually spot significant breakout points. The logic behind these signals is that whenever a price closes more than an ATR above the most recent close a change in volatility has occurred. Taking a long position is betting that the stock will follow through in the upward direction.