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Apply an Average True Range Indicator

The Average True Range indicator is used to determine the volatility of the market. The idea is to replace the high-low interval for the given period, as the high-low does not take into consideration gaps and limit moves. You set the period when you create the study.

The True Range is the largest of:

• difference between the current maximum and minimum (high - low)
• difference between the previous closing price and the current maximum
• difference between the previous closing price and the current minimum

The Average True Range is a simple moving average of the true range values.

To apply an Average True Range

1. From within a chart, from the Edit menu select Studies.
2. Choose Average True Range and Add the study.
3. Complete parameters as necessary.

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