ATR Extremes

Average True Range (ATR) is a commonly used indicator that measures the amount of movement in price over a set duration. However the value it gives is not defined within any sort of boundary, which makes using it for anything other than stop loss or take profit calculations, almost impossible.

This indicator is your standard ATR indicator, but we have introduced percentile demarcations so you can see the extremes.

You can choose between Percentiles and something we call Split Medians

Percentile Levels

Percentile levels are drawn at 1%, 5%, 20%, 50%, 80%, 95%, 99% and these show where price is in relation to all other values. For example, the 5% level says that below the line, only 5% of ATR reading get that low, and the 99% says that of the ATR values above that level, only 1% of value go that high.

Above 80%, you might choose to start lowering your position size for any new trades, and above 95% might be a good time to take some profit before the momentum changes.

Split Medians

The Split Medians setting is a simpler version with only 4 levels drawn, Extreme, Higher, Median and Lower. These levels work in exactly the same way as the Percentiles, but with a little more clarity. This is how the original version of the indicator worked until I became more proficient and changed it to Percentiles.

ATR Moving Average

The indicator also shows a moving average of the ATR value, which can be used to confirm a change in momentum direction.