ATR Gold Trading Analysis and ATR Gold Trading Signals
Developed by J. Welles Wilder
This indicator is a measure of volatility - it measures the range of xauusd price movement for a particular xauusd price period. The ATR is a directionless indicator and it does not determine the direction of the Gold trend.
High ATR values
High Average True Range values indicated market bottoms after a selloff.
Low ATR values
Low Average True Range values showed extended periods of sideways xauusd price movement- Gold Price Range, such as those found at market tops and consolidation periods. Low ATR values are typical for the periods of sideways movement of long duration which happen at the top of the xauusd market and during consolidation.
This indicator is calculated using the following:
- Difference between the current high and the current low
- Difference between the previous closing xauusd price and the current high
- Difference between the previous closing xauusd price and the current low
The final Average is calculated by adding these values and calculating the average.
XAUUSD Trading Analysis and Generating XAUUSD Trading Signals
Average True Range can be interpreted using the same principles as other volatility indicators.
Possible gold trend change signal - The higher the value of the indicator, the higher the probability of a gold trend change;
Measure of gold trend momentum - The lower the indicator’s value, the weaker the gold trend movement.