Average True Range
Measures recent range expansion without predicting direction.
Start with the input, not the story.
Smoothed true range, including overnight or inter-session gaps.
Plain-language formula
Platform implementations can differ in price input, smoothing, indexing and rounding. Record the exact settings and provider before comparing results.
Where it may help
Volatility-normalised stops, targets, filters and position sizing.
Where it struggles
Directional prediction: a high ATR says movement is large, not where price goes next.
Add a different measurement.
A complementary tool should answer a different question, such as volatility, regime or position risk. Test the base rule before testing the combination.
The shortcut to avoid
Using the same ATR multiple for every strategy without testing its stop logic.
A testable next step
Compare structural stops with 1.0, 1.5 and 2.0 ATR buffers using identical entries.
Download the editable research tool
Source code is provided for education and inspection. It does not place trades. Review, compile in MetaEditor and test on a demo account before any other use.
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