FTB-C000395 / Indicator

Average True Range

Average True Range is a declared moving or recursive average of True Range values.

Also known asATR

Intermediate Formula defined 3 linked topicsPublished

Definitions

In plain terms

Wilder's common variant uses an arithmetic seed followed by alpha-one-over-n recursive smoothing.

Technical

The implementation freezes true-range inputs, period, smoothing type, seed, readiness, missing bars, adjustment basis, and precision.

Scope

ATR measures range magnitude and does not identify price direction.

Formula

Wilder ATR_t = ATR_(t-1) + (TR_t - ATR_(t-1))/n
LaTeX: ATR_t=ATR_{t-1}+\frac{TR_t-ATR_{t-1}}{n}
SymbolMeaningUnit
ATR_(t-1)prior average true rangeprice
TR_tcurrent true rangeprice
nATR periodobservations

Output unit: price

Examples

  • A governed lesson calculates or identifies Average True Range only after its parameters, state, timing, and edge cases are declared.

Common misconceptions

  • ATR measures range magnitude and does not identify price direction.

Concept relationships

Prerequisites

Related

Required by

Where this concept is used

Tutorials planned

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

  • D07-F02-A08 Prerequisite
  • D07-F04-A02 Primary
  • D07-F04-A04 Prerequisite

Evidence and governance

  1. Average True Range TA-Lib · first party technical publication

    Supports: preferred label, short definition, technical definition, formula

    Limits: Seed, smoothing convention, lookback, and missing-bar handling must be declared for reproducible use.

Reviewed by
fintech-builder-batch-007
Last reviewed
2026-07-27
Next review
2027-07-27
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.