What is the average true range calculation in the context of cryptocurrency trading?

1 answers

• Lott KornumMay 22, 2024 · a year ago
  The average true range (ATR) calculation is an important tool in cryptocurrency trading. It helps traders gauge the volatility of a cryptocurrency and make informed decisions. The ATR is calculated by taking the average of the true range values, which measure the price range of a cryptocurrency over a specific period of time. A higher ATR value indicates higher volatility, meaning that the price of the cryptocurrency is more likely to experience larger price fluctuations. This can be both a risk and an opportunity for traders. They can use the ATR to set stop-loss orders to limit potential losses or to identify potential breakout opportunities. Overall, the ATR calculation provides valuable insights into the volatility of a cryptocurrency and helps traders make more informed trading decisions.
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