ATR Analysis and ATR Signals

Developed by J. Welles Wilder

This indicator is a measure of the price volatility - it measures the range of the price movement for a particular price period. The ATR is a directionless indicator and it does not determine the direction of the trend.

XAUUSD ATR Indicator - Average True Range Trading Indicator

High ATR values/readings

High Average True Range indicator values indicated market bottoms after a sell-off.

Low ATR indicator values/readings

Low ATR indicator values showed extended market periods of sideways price movement - Price Range/Ranging Market, such as those found at the market tops and at consolidation periods. Low ATR values are typical for the periods of sideways range bound market movement of long duration/period of time, which typically happens at the top of the market and also during the consolidation periods of the market.

Calculation

This indicator is calculated using the following:

Difference between the current high & the current low

Difference between previous closing price and the current high

Difference between previous closing price & the current low

The final Average is calculated by adding these values and calculating the average.

Trading Analysis and How to Generate Trading Signals

Average True Range indicator can be analyzed using the same principles as the other volatility indicators.

Possible price trend change signal - The higher the value of the technical indicator, the higher the probability of a market trend change;

Measure of gold trend momentum - The lower the technical indicator's value, the weaker the trend movement.

Average True Range (ATR) Analysis - XAUUSD ATR Indicator - Average True Range Trading Indicator

Technical Analysis in XAU/USD Trading

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ATR Analysis and ATR Signals

High ATR values/readings

Low ATR indicator values/readings

Trading Analysis and How to Generate Trading Signals