ATR Calculator: True Range and Averaging Limits

ATR means Average True Range. This ATR calculator checks a single bar [one chart candle] from Current High, Current Low and Previous Close. The result labelled Atr repeats that bar’s true range. The form cannot calculate a multi-period Average True Range because it has no price-history or previous-ATR input. Use it to check a bar’s range, then compare a properly averaged ATR on your chart before using the volatility based position sizing tool.

What the three price fields mean

A bar is one chart interval, such as a daily candle. Enter the highest and lowest price from the same completed bar. Previous Close is the closing price of the immediately preceding bar. It is not today’s close, your trade’s entry price or the previous bar’s opening price.

• Current High: the highest price reached during the chosen bar.
• Current Low: the lowest price reached during that same bar.
• Previous Close: the closing price immediately before the chosen bar began.

The visible form has no period setting, timeframe selector, trade direction, capital or quantity field. It does not fetch a chart. Using daily inputs gives a daily true range; using intraday inputs gives that interval’s true range. The form itself cannot check that the observations share an interval.

Use positive prices and verify the high and low before calculating. The underlying calculation swaps reversed high and low values into order, which can conceal a typing mistake rather than report it. Blank or zero price entries may also substitute stored prices, so they are unsuitable as missing-data markers.

True range includes the gap from the previous close

Calculate the high-minus-low distance, the absolute high-minus-previous-close distance and the absolute low-minus-previous-close distance. True Range is the largest of these three distances. Absolute means ignoring the sign, so the result measures distance in either direction.

This catches a gap that the high-low range alone misses. A bar can trade in a narrow band after opening far away from the previous close. The true range then includes the distance from that earlier close to the farthest extreme. It remains a price distance, rather than a forecast or a percentage return.

ATR for stocks, indices and different periods

The calculation is the same for stocks, index futures and other instruments, since it only uses prices. What changes is the scale. A stock at 100 and one at 5,000 have very different point ranges, so compare them through a consistently defined percentage, not raw points.

• Period: a shorter period reacts faster and a longer one is smoother. The common default is 14 bars, but there is no proven best.
• Interval: a daily ATR and a 5-minute ATR describe different things. Do not mix them in one plan.
• Gaps: shares often open away from the previous close. True range captures this, so ATR can jump after a gap even if the day itself was quiet.
• Check your numbers: if a chart ATR differs from yours, compare the period, smoothing and whether the latest bar is complete.

Worked example: why a gap changes the answer

For this made-up bar, enter Current High = 1,030, Current Low = 1,010 and Previous Close = 1,000. The three candidate distances are 1,030 − 1,010 = 20, 1,030 − 1,000 = 30, and 1,010 − 1,000 = 10. The largest is 30 points.

The form displays True Range = 30 and Atr = 30. It uses the midpoint of High and Low, (1,030 + 1,010) ÷ 2 = 1,020, as the percentage base because the page has no Current Price field. Atr Percent is therefore 30 ÷ 1,020 × 100 = 2.94% after rounding. This is neither a close-based ATR percentage nor a completed multi-bar ATR.

What a genuine averaged ATR needs

Average True Range combines true ranges across a chosen history. Fidelity describes a common setting of 14 periods and gives the continuing formula: current ATR = (previous ATR × (period − 1) + current true range) ÷ period. The previous ATR must already be calculated on the same instrument, interval and smoothing method.

TradingView uses RMA [Wilder-style moving average] by default, with other smoothing choices available. Different settings can produce different values even when the instrument name matches. Compare the chart interval, period, smoothing, completed-bar status and price series before comparing numbers.

A separate, made-up smoothing example starts with an already established previous ATR of 26 and the current true range of 30. At a chosen period of 14, the next value is (26 × 13 + 30) ÷ 14 = 26.29 after rounding. That calculation explains the missing averaging step; the form above cannot accept the previous value or reproduce this update.

Without an earlier established ATR, first build a sequence of true ranges and seed the series consistently with your chosen chart method. A single high, low and previous close cannot reveal the missing observations. Changing today’s prices repeatedly does not build a saved history in this calculator.

How to calculate an average true range by hand

People who search for an average true range calculator want the averaged number a chart shows. The form above gives one bar, so here is the full method in small steps. To keep the table short, this made-up example uses a period of 5. A chart's usual setting is longer, and the steps are the same.

1. Work out the true range for each bar, using the three-distance rule above.
2. Start the series by averaging the first 5 true ranges. Charting packages differ on how they start, so your first values may not match a chart.
3. From the next bar on, use the continuing formula: new ATR = (previous ATR × (period − 1) + current true range) ÷ period.

A bigger true range lifts the ATR a little and a smaller one lowers it a little. That is why the line looks smooth. Bar 6's range of 20 pulled the ATR from 14.00 to 15.20, and bar 7's range of 10 brought it down to 14.16. With a longer period, each new bar moves the average even less.

Read the labels without treating them as a signal

True Range is the directly supported output. Atr and Atr Percent need the limitations described above. Volatility is a fixed category derived from percentage cut-offs in the tool; it is not a ranking against the instrument’s historical distribution. The page does not measure the frequency of similar bars.

ATR measures movement size and contains no bullish or bearish direction by itself. A large range can accompany an advance or a fall. A quiet range does not establish that the next bar will break out, and a historical average does not cap tomorrow’s move.

For comparing instruments with different price levels, a consistently defined percentage is more informative than comparing raw point values alone. This page’s midpoint-based number still needs a matching basis elsewhere. It should not be compared directly with a chart’s closing-price percentage without recognising that difference.

Carry a verified volatility value into a risk plan

A hypothetical ATR multiple can describe a planned stop distance, but it cannot guarantee that the stop will execute at the selected price. A larger stop distance also changes planned loss for the same quantity. Use the risk per trade calculator to examine the money at risk and the risk reward calculator to compare a chosen target with that loss.

For options, keep the instrument consistent: an underlying index’s point range is different from the option premium’s change. A fixed conversion from index points to option profit ignores changing option sensitivity and other pricing inputs. Record the exact series and interval alongside the value you actually used.

ATR stop loss: a worked example with an ATR multiple

An ATR stop sets the stop distance as a multiple of the averaged ATR, so it widens when markets are lively and tightens when they are quiet. Fidelity's guide notes that ATR can be used for stops and that a multiple such as 1.5 × ATR is one way to allow for unusual moves. The multiple is your choice, and no value is proven best.

Here is a fictional cash-share example. A stock has an averaged ATR of 26 points and you plan a long trade at 1,000 with a stop 2 × ATR below. The stop distance is 2 × 26 = 52 points, so the stop sits at 1,000 − 52 = 948. If your rupee risk budget is ₹5,000, quantity is 5,000 ÷ 52 = 96.15, which rounds down to 96 shares. Planned price loss is 96 × 52 = ₹4,992 before costs. This is an example, not a trade idea, and a stop may fill at a worse price than planned.

To test this on your own numbers, take the ATR from your chart, then use the stop loss calculator. Read how to set targets using ATR and the ATR trailing stop strategy page for more.

Using ATR to size a position

ATR sets how far away the stop is, and the stop distance together with your risk budget sets the quantity. The steps are: pick the budget in rupees, turn ATR into a stop distance, divide the budget by the loss per unit and round down. A wider stop means fewer shares or lots for the same budget, which is the point of the method: the account risks about the same rupee amount whether the market is calm or wild.

For index contracts, multiply the stop distance by units per lot instead. The risk per trade calculator does this for Indian index lots, and the position size guide explains the maths in full.

Sources

• Fidelity: Average True Range (checked 15 October 2026).
• TradingView: Average True Range calculation and settings (checked 15 October 2026).