— HOW IT WORKS
What ATR does, and when it works.
ATR measures the average range a candle covers over a lookback (default 14), giving you a single number for how much price is moving right now. It says nothing about direction — it is a pure volatility reading.
Its highest-value use is risk management: set stops a multiple of ATR away from entry so your stop adapts to current conditions instead of a fixed percentage. It also underpins Supertrend, UT Bot and Keltner Channels, so understanding ATR makes those tools click.
ATR is a sizing tool, not a signal. A rising ATR tells you volatility is expanding, not which way price will go — combine it with a directional read.
— BEST FOR
Where it earns its slot.
cryptovolatilityrisk-managementday-trading