This indicator was modified according to the 'Way Of The Turtle'. The ATR indicator can be used as a reference to set stop-loss or take-profit, and also can be used to confirm the daily price range (also applicable to other cycles).
The true range value is calculated as follows:
- TR = MAX(H-L, H-PDC, PDC-L)
- H = Highest price of the current bar
- L = Lowest price of the current bar
- PDC = Close price of the previous bar
The average true range in 'Way Of The Turtle' is calculated as follows:
- ATR = ((period-1)*PDN+TR)/period
- PDN = ATR value of the previous bar
- TR = True range value of the current bar
NOTE: We use the simple average value as the first ATR value.
- ATR Period - set the period of the ATR indicator, default value is 14.