What ATR measures — on a real chart
Short · Reading charts · October 2, 2026
Olympia publishes educational content for learning purposes only. Past performance is not indicative of future results. Nothing here is investment advice.
Every stock has a normal day. ATR tells you how big that normal day is: the high minus the low, the overnight gap counted in, averaged over fourteen days and divided by the price. It won't tell you which stock wins — it tells you how much room the trade needs.
The lesson in writing
Every stock has a normal day. Average true range tells you how big that day is going to be.
What it is
ATR stands for average true range. That is a measurement of how it has been moving — a guide to how much room to leave, not a promise about tomorrow.
That is the whole of its job. It won't tell you which stock wins. It tells you how much room the trade needs to be successful.
How it's worked out
Start with one day: the high minus the low — how far the price travelled.
“True” means the gap counts too. If it opened well above or below the day before's close, that jump is part of the move for that day, so the range is measured from that earlier close whenever that stretch is the wider one. A stock that gapped and then sat still did not have a quiet day, and the true range says so.
Now do that for the last fourteen days and average them. That is the ATR, and it comes out in dollars.
Divide it by the price and you get a percent. Seven percent means that name swings about seven percent on an ordinary day — and the percent is what lets you compare a ten-dollar stock with a three-hundred-dollar one.
Where Olympia calculates it
You don't have to work any of that out. Olympia calculates it for every signal.
It sets the entry zone — the band is drawn one ATR either side of today's centre, measured on the same clock the signal runs on. On the scanner it has a column of its own, ATR % (daily): the average true range over fourteen daily bars as a percent of the close, worked out for every name that gets scanned.
And when you mark a signal as one you're in, it uses that same number to show stop levels below your entry — each one a multiple of the name's own range, so you can see how much of its ordinary breathing your stop is sitting inside of.
The seven percent is an example figure. ATR: average true range over fourteen daily bars, split-adjusted, as a percent of the close. Historical, not predictive.
