Average True Range measures how much the market typically moves per candle, making it one of the best risk-framing tools in CandleOps.
Average True Range measures how much the market typically moves per candle, making it one of the best risk-framing tools in CandleOps.
ATR measures how much the market normally moves per candle. It is not directional, but it is one of the cleanest ways to make stops and targets proportional to current volatility.
Average True Range is shown as a signal panel: price stays above, while the lower pane helps you judge momentum, volatility, volume pressure, or trend strength.
TR = max(high - low, abs(high - previous close), abs(low - previous close))ATR = moving average(TR, n)ATR measures how much the market normally moves per candle. It is not directional, but it is one of the cleanest ways to make stops and targets proportional to current volatility.
Use ATR to size stops, targets, and expectation. If the current mission is moving less than one ATR, treat every breakout story with more suspicion.
Average True Range should tell you whether the mission is compressing, expanding, or stretching too far from a fair reference. Use it to size expectations, then let price structure choose the actual side.
ATR works best when combined with structure. Good trades use ATR to frame distance, not to replace market reading.
Confirmation should be visible before the trade starts. If the indicator says one thing and raw candles reject that story, skip the mission or record it as a conflicted setup.
Period: 14
ATR is not directional. It tells you how much, not which way.
Because Average True Range sits in a separate panel, the common trap is staring at the value while ignoring the candles. A panel signal needs price confirmation before it deserves risk.
The indicator should change the decision process, not decorate it. If it does not affect direction, invalidation, target placement, or the decision to skip, remove it from the active tactical handbook for that drill.