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Calculating 20 day ATR
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Calculating 20 day ATR

  #1 (permalink)
Trading Apprentice
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Calculating 20 day ATR

Hi everyone, I was reading the book "Stocks on the Move", and came across using ATR to calculate some stuff. I use the tos platform, and I was wondering how you find the 20 day ATR. Do you use the 1m, 5m, 15m, 30m, 1h, 4h, or 1D chart? Also, would you edit the ATR study length from 14 to 20? Any help would be appreciated! Thank you in advance!

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  #2 (permalink)
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stackedoptions View Post
Hi everyone, I was reading the book "Stocks on the Move", and came across using ATR to calculate some stuff. I use the tos platform, and I was wondering how you find the 20 day ATR. Do you use the 1m, 5m, 15m, 30m, 1h, 4h, or 1D chart? Also, would you edit the ATR study length from 14 to 20? Any help would be appreciated! Thank you in advance!

Assuming ATR stands for Average Trading Range, you take the past 20 days high and low, calculate the range for each day = high-low and take a 20 period average of that range to arrive at the 20 day ATR. You can do this in excel if you want.

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@Hulk


ATR stands for Average True Range, but your explanation is correct partially I think. From what I know, ATR is always positive because the absolute value may be taken, I believe, and/or you subtract the smallest (either open or close) from the highest (either open or close). I understand that I can calculate the 20 day ATR in excel manually, but I was wondering how I would find it automatically on the think or swim platform. I don't know which chart to use, and which input to use for the length parameter. I do appreciate your response!

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stackedoptions View Post
ATR stands for Average True Range, but your explanation is correct partially I think. From what I know, ATR is always positive because the absolute value may be taken, I believe, and/or you subtract the smallest (either open or close) from the highest (either open or close). I understand that I can calculate the 20 day ATR in excel manually, but I was wondering how I would find it automatically on the think or swim platform. I don't know which chart to use, and which input to use for the length parameter. I do appreciate your response!

I dont use TOS but there must be an ATR study in there. You want to use the daily chart and length should be 20 to calculate a value over 20 days.

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stackedoptions View Post
I was wondering how you find the 20 day ATR.

The expression "20-day ATR" means "the daily Average True Range averaged over 20 days".


stackedoptions View Post
Do you use the 1m, 5m, 15m, 30m, 1h, 4h, or 1D chart?

1-day chart, and set the ATR to 20 periods (i.e. rather than the default of 14 periods).

ATR is an indicator to be a little careful with: sometimes there can be (for some "fundamental"/"one-off" reason) an uncharacteristically huge swing within a specific day, and that will exaggerate the ATR. Also in some platforms Saturdays and/or Sundays, with no (or almost no) range at all can sometimes be included in an automated calculation without you knowing - depending on what you're trading - and this is something else to be aware of. In forex, for example, one can get different ATR's showing, according to the time of day the charting software takes as its start/end-of-day (which you may also be able to re-set, to avoid anomalies).

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