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 Posted : Thursday, November 30, 2017 5:16:56 PM
Platinum Customer

Joined: 10/7/2004
Posts: 1,025

Stockcharts explains there are three formula used for Average True Range.  Which of these methods is used for Worden's ATR?

## Wilder started with a concept called True Range (TR), which is defined as the greatest of the following:

• Method 1: Current High less the current Low
• Method 2: Current High less the previous Close (absolute value)
• Method 3: Current Low less the previous Close (absolute value)
 Posted : Thursday, November 30, 2017 5:20:37 PM
Platinum Customer

Joined: 10/7/2004
Posts: 1,025

Also, please provide formulas for each of the above three methods for a one-period (one bar) ATR.

StockGuy
 Posted : Friday, December 01, 2017 9:34:22 AM

Joined: 9/30/2004
Posts: 8,887

They are all the same method.   True range is the greatest of the three.

A one period ATR is ATR(1).

 Posted : Tuesday, January 02, 2018 9:43:40 PM
Platinum Customer

Joined: 10/7/2004
Posts: 1,025

Finally, are you familiar with Chapter Five, "Trading with an Edge" in Curtis M. Faith's, "The Way of the Turtle"?

To jog your memory if you have read this boook, In this chapter, Faith speaks of E-Ratios, MAE, MFE, Bad Price Movement, and Good Price Movement.

I have worked out several of these concepts, and am now ready to work out the more complex ones.

To start the process, please provide the mathematical formulas for Average True Range 10 bars  -- and also for ATR 50 bars.

Or, just use an x for the number of ATR bars, as I may need to test additional combinations from the 10 and 50 mentioned above.

Hoping you had a fun New Year's Eve -- and that 2018 will be a great year for you, Bruce, and for Worden.

StockGuy
 Posted : Wednesday, January 03, 2018 9:05:35 AM

Joined: 9/30/2004
Posts: 8,887

ATR(10)

ATR(50)

ATR(x) where x is the period

 Posted : Wednesday, January 03, 2018 9:19:46 AM
Platinum Customer

Joined: 10/7/2004
Posts: 1,025

I see that V17 has the following capabilities:

ATR(xz) -> Average True Range (uses simple moving average for smoothing)

ATRx.z -> Average True Range (uses simple moving average for smoothing)

AVG(wx) -> Simple Moving Average - Returns the x period simple moving average of w.

AVGwx.z -> Simple Moving Average of Price Component or Volume over a specified span of bars ending on the specified bar (w must be O, H, L, C or V

In providing the following, which of the above are you using, Bruce?

ATR(10)

ATR(50)

ATR(x) where x is the period

Bruce_L
 Posted : Wednesday, January 03, 2018 9:41:41 AM

Worden Trainer

Joined: 10/7/2004
Posts: 61,564

It is using the first syntax. It is just not using the optional z parameter since it is for the current bar and not a previous bar.

ATR(xz) -> Average True Range (uses simple moving average for smoothing)

-Bruce
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 Posted : Wednesday, January 03, 2018 9:49:45 AM
Platinum Customer

Joined: 10/7/2004
Posts: 1,025

Thanks for the explanation...

Bruce_L
 Posted : Wednesday, January 03, 2018 10:13:03 AM

Worden Trainer

Joined: 10/7/2004
Posts: 61,564

You're welcome.

-Bruce
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