LEARN THE DESK / VOLATILITY
ATR and volatility explained
Calculate true range and ATR, understand gaps and learn what a volatility estimate does and does not predict.
How much is price moving?
Volatility measures the size or variability of price movement, not its direction. True range considers both the candle’s high-to-low distance and gaps from the previous close. ATR smooths those ranges. The desk’s HAR model estimates realized volatility; ATR is a separate, simpler measure that helps make the idea concrete.
Try it with your own numbers
Local calculation only. These inputs are illustrative, not live quotes. Nothing you enter is uploaded.
Worked example
With high $105, low $102 and previous close $100, true range is $5. Looking only at high minus low would miss the gap and give $3. If prior ATR was $2, the next Wilder ATR(14) is about $2.21.
The calculation
TR = max(high − low, |high − previous close|, |low − previous close|). Next ATR14 = (13 × prior ATR + TR) / 14.Method and references
Fidelity: true range and Wilder ATR calculationExercises use the values you enter, not a hidden market feed. Examples demonstrate mechanics; they are not evidence of profitability. Reviewed October 11, 2026.
What this cannot tell you
High volatility can occur during rises or falls. An ATR value is not a guaranteed next-bar range or a confidence interval. The entered prior ATR should already have been seeded from 14 true ranges.