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ATR creator: J. Welles wilder
Concept: Definedge
There are two lines plotted below the chart for the ATR% indicator.
The ATR (Average True Range) indicator shows the volatility of each stock. Volatility is represented by the ATR, which is the absolute value.
Due to the fact that both instruments trade at different levels and ATR values are expressed in absolute numbers, it may be difficult to compare the ATR reading of one instrument to another. As a result of the difference in price levels, it is difficult to compare the ATR of the same stock with the past.
ATR% is an indicator that addresses this concern and shows ATR as a percentage that can be compared to other stocks and past readings of the same stock.
If the ATR% is high or exceeds its moving average line, it can be considered high volatility, and vice versa.
In TradePoint & RZone, Point & Figure and Renko charts can be plotted using box-value and brick-value derived from ATR%. This concept is developed by Definedge.
The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.
This indicator is available in the System Builder on RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.
The indicator is applicable to all types of charting. It is calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin-Ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.