FTB-C000471 / Financial concept

ATR Shock Decay

ATR Shock Decay is the geometric reduction of an isolated True Range shock's influence across later recursive updates.

Also known asATR impulse decay

Advanced 1 linked topicPublished

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

Prerequisites

Related

Where this concept is used

Tutorials planned

These catalogued topics use this concept, but their complete build has not shipped yet.

  • D07-F04-A02 Important

Evidence and governance

  1. 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.

  2. 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
Written by

Fintech engineer building market-data and financial systems, and the author of every article, glossary record, and reference implementation on The Fintech Builder.