What is Average True Range Atr: Definition & Meaning Explained

Definition of Average True Range Atr

The Average True Range (ATR) is a technical indicator used to measure market volatility, typically using the average of true ranges from 14 periods that can be daily, weekly, monthly, or even intraday values.

The formula for ATR is:

ATR = Previous ATR (n - 1) + True Rangen / n

n= number of periods
True Range = The greater/highest of these:

High - low (Day 1)
Absolute value of (Day 1’s high - Day 0’s close)
Absolute value of (Day 1’s low - Day 0’s close)

Gold Futures

Gold futures are commodity derivatives that derive their value from gold bullion. A trader who buys a gold futures contract acquires the right and obligation to buy gold at a later date and price that’s pre-agreed. Gold futures in India are eligible for physical delivery once the terms of the contract are successfully fulfilled.

India VIX

India VIX is an index that measures volatility and market sentiment. The term VIX stands for Volatility Index and thus, the full form of India VIX is Indian Volatility Index.

A higher India VIX means higher volatility whereas India VIX would be lower due periods of low volatility. In fact, there are absolute values that help understand volatility via India VIX.

India VIX typically moves between 15 to 30, which represents a range that is considered “normal” as far as volatility is concerned.

However, India VIX has touched 90 during the 2008 financial crisis and trended near the value once again when the pandemic broke out in 2020.

Dividend Per Share

Dividend per share indicates the amount of dividends paid as a ratio of the number of shares outstanding. Or, dividend per share could also refer to the product of earnings per share and dividend payout ratio.

Thus, the formula to calculate dividend per share is:

DPS: Total dividend amount / Number of shares outstanding

Or

DPS: Earnings Per Share x Dividend Payout Ratio

An investor can determine how much dividends they stand to earn for each share they own by calculating dividends per share.

Bonds

Bonds are fixed income securities issued in exchange for a loan, generally by governments and corporations. A bond will generate a fixed interest rate on top of the principal across a fixed time period. A bond market is a place where bonds are issued, bought, and sold. Bonds are issued in exchange for a loan generally by governments and corporations.

The quality of a bond can be understood by its credit rating, which is nothing but the creditworthiness of the company issuing it. The best bonds in India are known to have the following credit rating:

SOV: Only for government bonds
AAA: Highest
AA+: High-medium
A+: Upper-medium
BBB+: Lower-medium
BB+: Speculative
B+: Highlight speculative
CCC+: Risky
CC: Extremely risky

*All securities mentioned on this website are exemplary and not recommendatory.

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Average True Range Atr

Average True Range Atr

Definition of Average True Range Atr

Gold Futures

India VIX

Delivery Date

Dividend Per Share

Bonds

Ask Or Offer Price

Invest & Trade with a Trading
Platform That's #MadeForTrade

Average True Range Atr

Average True Range Atr

Definition of Average True Range Atr

Gold Futures

India VIX

Delivery Date

Dividend Per Share

Bonds

Ask Or Offer Price

Invest & Trade with a Trading Platform That's #MadeForTrade

Invest & Trade with a Trading
Platform That's #MadeForTrade