Stock--The mean value of true fluctuation amplitude

ATR (Average True range, true amplitude mean) is a technical indicator to measure the volatility of stock prices.

The true amplitude mean (ATR) is an indispensable tool for trading system designers, which is called a real dark horse in technical indicators. Every system trader should be familiar with the ATR and its many useful functions. Many of its applications include: parameter setting, entry, stop loss, profit, and even a very valuable auxiliary tool in money management.

Concept Introduction true fluctuation amplitude mean (ATR) is a technical analysis indicator developed by Wells Wang Lede, with the average trading fluctuation amplitude of the exponential moving averages of N days. The trading range of the day is simply Maximum value-Minimum value。 The true range of fluctuations includes yesterday's closing price, if it is outside today's range: true volatility = max (maximum, yesterday's closing price)? MIN (minimum, yesterday close) The true amplitude mean is the N-day exponential moving average of the "true fluctuation amplitude". The concept of a range of fluctuations indicates the expectations and enthusiasm of the trader. A sharp or increasing fluctuation indicates that the trader may be ready to continue to buy or sell stocks on the same day. A decrease in volatility indicates that traders are not much interested in the stock market. Calculation method fluctuation Amplitude: The distance between the highest and lowest point of a single candlestick chart. True fluctuation amplitude: is the maximum value of 1 for the following three fluctuation ranges. The distance between the highest and lowest points of the day is 2. The distance between the closing price and the highest price of the day is 3. The difference between the true fluctuation amplitude and the single candlestick is different when the day before yesterday's close and the lowest price of the day when the candlestick chart gaps. The mean value of true fluctuation amplitude is the average of true fluctuation amplitude. In order for ATR to reflect short-term volatility, short-term ATR (2-10 candlestick charts) can be used, and 20 to 50 candlesticks or more can be used to reflect the "long-term" volatility of the ATR. The average amplitude index of [1]  is a kind of judgment signal whether it crosses the moving average from the bottom up or the moving average from the top down. It indicates that the trend of stock price operation is likely to be reversed, and how to change it should be combined with trend indicators. Features and Applications ATR is a general index to evaluate the market price movement, and is a true adaptive indicator. The following example can help explain the importance of these characteristics. If we calculate the average price fluctuation of corn over a two-day period, say $500, the average price fluctuation in the yen contract could be $2,000 or more. If we are going to set up a trading system that sets the appropriate stop levels for corn or yen, then we will see that the level of stop loss is different because the two have different volatility. We may set a stop loss level of $750 on the corn and $3,000 in the yen contract. If we are to create a trading system that can be applied to both markets, it is difficult to make the stop loss levels in the US dollar amount equal in both markets. The $750 stop-loss level is appropriate for corn, but it may be too small for the yen, and a 3,000-dollar stop-loss level is appropriate for the yen, but too big for corn. Use caution this indicator can usually reach a higher value at the bottom of the market due to a sharp fall in prices driven by panic buying. This indicator is typical for periods of prolonged margins movement, usually at the top of the market, or during price consolidation. The average amplitude channel specification is based on the same principle and can be interpreted as some other variable index. The principle of prediction based on this indicator can be expressed as: the higher the value of the indicator, the likelihood of a change in trend, the lower the value of the indicator, the weaker the trend mobility. The ATR amplitude index is a kind of judgment signal whether it crosses the moving average from the bottom up or through the moving average from the top down. It indicates that the trend of stock price operation is likely to be reversed, and how to change it should be combined with trend indicators. Here's a reminder. ATR is generally not used alone, and should be combined with other indicators to be judged synthetically.

Stock--true fluctuation amplitude mean