Definitions
In plain terms
A range spike affects ATR immediately and then fades gradually instead of disappearing on one window-expiry row.
Technical
With period n, the remaining incremental influence is multiplied by (n-1)/n on every later valid update.
Scope
Decay describes indicator memory; it does not predict how market volatility itself will evolve.
Examples
- A reviewer traces ATR Shock Decay from aligned inputs through its first-ready row and edge cases before accepting a displayed value.
Common misconceptions
- Decay describes indicator memory; it does not predict how market volatility itself will evolve.
Concept relationships
Where this concept is used
Evidence and governance
- Average True Range TA-Lib · first party technical publication
Supports: preferred label, short definition, technical definition
Limits: Seed, smoothing convention, lookback, and missing-bar handling must be declared for reproducible use.
- TA-Lib Average True Range Reference Implementation TA-Lib · first party technical publication
Supports: preferred label, short definition, technical definition
Limits: TA-Lib readiness follows its own unavailable-first-TR convention and therefore differs from the local alignment.
- Reviewed by
- fintech-builder-batch-009
- Last reviewed
- 2026-07-30
- Next review
- 2027-07-30
- Record status
- published