A volatility measure from J. Welles Wilder: the average of each period's "true range" (the largest of high minus low, or the gaps from the prior close).
How traders use it: Used to pad stops beyond levels, to compare volatility across markets, and to spot compression.
Common mistake: Using ATR alone to set a stop with no structural reason for that location.
Related: Stop placement · Compression (consolidation) · Indicator
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Concepts only. Education only, not financial advice. No pattern on this site has a published win rate.