--- title: "What Is Average True Range (ATR)?" term: "Average true range (ATR)" type: glossary_term canonical: https://www.moonwire.org/insights/glossary/average-true-range.html --- # What Is Average True Range (ATR)? > A volatility measure: the average size of each bar's full trading range, including gaps from the previous close. It says how much price typically moves per bar, not in which direction. **Average true range (ATR)** is a volatility indicator introduced by J. Welles Wilder alongside RSI. It measures how far price typically travels within a bar, and it deliberately ignores direction: a market falling hard and a market rising hard can have the same ATR. ## True range first A bar's plain range is its high minus its low. That misses gaps — if a market closes at 100 and the next bar trades between 110 and 112, the range of 2 badly understates a move of 12. **True range** fixes this by taking the largest of: 1. the current high minus the current low, 2. the distance from the current high to the previous close, 3. the distance from the current low to the previous close. **ATR** is then the average of true range over a window — 14 bars by convention, and in MoonWire reads — using Wilder's smoothing. ## Reading it as a percentage An ATR of 3,000 means something very different for Bitcoin at 60,000 and at 120,000. Our reads therefore quote ATR as a **share of price**: "ATR14 is 5.6% of price" means the average 3-day bar recently spanned about 5.6% of the asset's value. That makes volatility comparable across assets and across time, and across the nine cells of a [multi-timeframe](https://www.moonwire.org/insights/glossary/multi-timeframe-analysis.md) board. ## What ATR is used for - **Scaling other measurements.** In our [support and resistance](https://www.moonwire.org/insights/glossary/support-and-resistance.md) detection, the tolerance for merging nearby swing points into one level scales with ATR, so levels are grouped more loosely in volatile conditions. - **Distances in volatility units.** Saying a level is "2.06 ATRs away" describes how many typical bars of movement separate it from price, which is more informative than a raw percentage alone. - **Regime context.** Rising ATR describes an expanding range; falling ATR a compressing one. ATR says nothing about whether a move will continue. It describes how large recent moves have been. ## Further reading - [Wikipedia: Average true range](https://en.wikipedia.org/wiki/Average_true_range) - [Investopedia: Average True Range (ATR)](https://www.investopedia.com/terms/a/atr.asp) ## Where this appears in MoonWire analysis - [What Is the Efficiency Ratio in Trading? Kaufman's Measure, With Real Readings](https://www.moonwire.org/insights/what-is-the-efficiency-ratio-in-trading.md) — Sep 12, 2026 - [Bitcoin: all three timeframe scans now name the same resistance shelf, 82,575 to 82,850](https://www.moonwire.org/insights/btc-technical-read-2026-09-10.md) — Sep 11, 2026 - [Solana: a new 3D pivot at 110.60 has filled part of the 45% stretch that was empty a week ago](https://www.moonwire.org/insights/sol-technical-read-2026-09-03.md) — Sep 11, 2026 - [Ethereum: the weekly scan has compressed to a 2.85% band - 0.30 of one ATR, the tightest cell on the board](https://www.moonwire.org/insights/eth-technical-read-2026-09-03.md) — Sep 11, 2026 - [Bitcoin: the converged 80,600 floor has left both the 3D and weekly ledgers as price gives back 4.54%](https://www.moonwire.org/insights/btc-technical-read-2026-09-03.md) — Sep 11, 2026 - [Solana: the widest near-term range in the set meets the most directional monthly downtrend, as the 3D ticks up](https://www.moonwire.org/insights/sol-technical-read-2026-07-21.md) — Jul 21, 2026 --- *MoonWire surfaces and summarizes public crypto news.* **General information only — not financial advice.** MoonWire Ltd. is not licensed by ASIC and holds no AFSL. This content does not consider your objectives, financial situation, or needs, and is not a recommendation to buy, sell, or hold any asset. *This analysis is generated by artificial intelligence and may be inaccurate, incomplete, or fabricated. Independently verify before acting.* © 2026 MoonWire Ltd. · [Terms](https://www.moonwire.org/legal/TOS) · [Risk Disclosure](https://www.moonwire.org/legal/RISK_DISCLOSURE) · [Privacy Policy](https://www.moonwire.org/legal/PRIVACY_POLICY)