Learn With ETMarkets | You, Me and Trading: Discussion of trading strategies using the ATR indicator

ATR (Average True Range) is a volatility-based indicator developed by J. Welles Wilder, the creator of RSI & ADX indicators. It calculates the session’s range by considering current high & low prices and gaps. You use the highest value among three ranges: R, difference between current high and previous close; R1, difference between current low and previous close; R2, to calculate the True Range of the candle. ATR-based indicators such as Supertrend and ADX are popular, and ATR is used for box-value or brick-value in P&F or Renko charts in most software.