How does the Average True Range indicator operate? The well known by its acronym in English or rightful average range in Spanish, supports the operator provides information on the Forex market volatility which is presented for the first time by its creator J. 1.978 Welles Wilder, who announced the existence of this indicador.Al Like other indicators that was generated for the convenience and ease of operators of the exchange market, so they can know the unstable and stable stock market and securities at the end of the day. In other words, the ATR indicator can indicate the strength or weakness of a market orientation and allows the average value of a desired parity pips. It should not be taken as an indicator or signal creator to buy or sell at a particular time in the Forex market. Additionally, this indicator although there may be a bit of a contradiction, if used in conjunction with strategies, may indicate the ideal moment to take a position on the market or leave it.
The ATR does not measure changes in the orientation or changes in direction, or duration of volatility. Likewise, the ATR indicator is used as a basis for other more complex indicators, such as the RWI (Randon Walking Index), among others. yComo properly implement the indicator of average true range? The creator of this indicator uses three options to acquire its value as follows: a The absolute value of a distinction between the maximum current and previous closing price.