For installation of the Indicator of the Average True Range on graphic, let's click the button Indicators at a toolbar and we will select from the appeared menu Ocillators - Average True Range
After that, will appear a window where we can change properties of the exposed indicator. We can select the averaging period, and also visual settings, and fix minimum and maximum.
The indicator of the Average True Range also called ATR is an index of volatility of the market. It was established by Wells Wilder and first mentioned in the book 'New Concepts of Technical Trade Systems' and since then the indicator was widely adopted.
ATR often reaches high values after the prompt falling or an increase in prices caused by panic sales.
Low indicator values often correspond to the continuous periods of horizontal movement which can be seen at peaks of the market and during consolidation.
ATR can be interpreted by the same rules, as other indicators of volatility.
The principle of trade is formulated as follows: the indicator value is higher, the probability of change of a trend is higher. On graphics we can mark it in the following cases.
The given indicator is also hardly applicable for finding of entry point. It is rather for closing of the transaction on a trend which sputtered out.