For investors, understanding the range of price fluctuations of a stock is crucial. Among them, the Average True Range (ATR) is an indicator of stock volatility. ATR can help investors assess the volatility of stocks and make better investment decisions. However, many investors do not understand how to check the ATR value of a stock. Next, we will go into detail on how to view the ATR of stocks and explain its importance and how to apply this indicator.
Calculation method of ATR
ATR was proposed in 1978 by the master technical analyst Welles Wilder. The calculation method is as follows:
Step Description 1 Calculate the difference between the highest and lowest prices for the day. 2 If the difference between the high price of the day and the closing price of the previous day is larger, choose the difference between the two. 3 Square the gap obtained in the previous two steps and average it together with the gap over the past 14 trading days. The result obtained from the root of 4 is the ATR value.In actual operation, we can use some financial analysis software or online platforms to automatically calculate the ATR value, thereby simplifying the calculation process.
How to view ATR through trading platform
Most trading platforms provide the ability to view ATR. Here are a few common trading platforms how to view ATR:
MetaTrader 4/5spinscoreslot: Right-click on the chart, select "Indicator List", find "ATR" there and add it to the chart. TradingView: Type "ATR" directly in the search box, click on "ATR Indicator" in the search results, and add it to the chart. Domestic trading platforms such as Tongdaxin and Tonghuashun (300033): Add the ATR indicator in the indicator editor, or directly right-click on the chart and select "Add Indicator" to find "ATR" and add it.Applications of ATR
Through the ATR value, investors can judge the volatility of stocks and formulate corresponding trading strategies. For example, when the ATR value increases, it indicates that the stock's volatility increasesspinscoreslot; otherwise, it indicates that volatility has decreased. In addition, ATR can also be used to set stop losses and manage positions.
For example, if an investor decides to buy a stock at the current price, he can use the ATR value as a reference for his stop loss point. If the ATR value is 5, consider setting the stop loss point to the current price minus 5. Similarly, in terms of position management, investors can also adjust their positions based on the ATR value to control risk.
summary
Through the above introduction, investors should have a certain understanding of how to check the ATR of stocks. Remember that ATR is one of the important indicators for assessing stock volatility. Reasonable use of ATR can help investors formulate more scientific and reasonable trading strategies.