Article/Author: Omega Research Inc., 1997

Download: ATR.ELA

Category: Indicator > Volatility Based

Description:

True Range measures the conventional range of a bar but checks the previous bar�s closing price to see if it is outside the current bar�s range. If it is, then that closing price is used instead of the high or low. That is, the previous bar�s close is considered part of the current bar�s range. This helps account for gaps between bars. The Average True Range indicator calculates and plots the average of these values over a certain number of bars.

Usage:

This indicator may be considered a tool for measuring the volatility of a market using a price range concept. Often, extremes in Average True Range are associated with a change in character of a market, from trending to trading range and vice versa.

INPUT: LENGTH(14);



PLOT1(AVGTRUERANGE(LENGTH), "AVGTRUERANGE"); 



{ALERT CRITERIA}

IF PLOT1 > HIGHEST(PLOT1, 20)[1] THEN

	ALERT("A NEW "+ NUMTOSTR(LENGTH, 0)+" BAR HIGH HAS BEEN MADE")

ELSE

	IF PLOT1 < LOWEST(PLOT1, 20)[1] THEN

		ALERT("A NEW "+ NUMTOSTR(LENGTH, 0)+" BAR LOW HAS BEEN MADE");