Average True Range (ATR) is a technical analysis indicator used to measure market volatility. It shows the average range between the high and low prices over a specified period, typically 14 days. A higher ATR indicates higher volatility, while a lower ATR suggests lower volatility.
Traders use ATR to help determine the level of risk associated with a particular cryptocurrency. By understanding the average price range, traders can make more informed decisions about entry and exit points, as well as setting stop-loss and take-profit levels.
ATR is valuable for determining potential price movements and setting appropriate levels for risk management. It can be used in conjunction with other indicators to form a comprehensive trading strategy. Additionally, ATR can be calculated on different timeframes to provide a more detailed analysis of market volatility.
