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Section: 3 Market Structure
Sub Section: 3 Average True Range (ATR)
The Average True Range is an indicator that measures commitment and compares the range between the High, Low and Close prices. This indicator was developed by J.Welles Wilder.
High ATR values often occur at market bottoms following a "panic" sell-off. Low Average True Range values are often found during extended sideways periods, such as those found at tops and after consolidation periods. ATR measures a security's volatility, but gives no indication of price direction or duration.