The Wilder ATR, developed by J. Welles Wilder, is a vital tool for traders looking to gauge market volatility. This indicator gives you a clearer picture of price movement and can greatly enhance your trading strategy.
Wilder ATR comes with two key adjustable parameters:
- Period - This defines the calculation timeframe for the indicator.
- Method - This refers to the smoothing technique applied to the data.
Here's how to calculate it:
Wilder ATR = MA(TR, Period, Method)
Where:
TR (True Range) = Maximum(HL, HC, LC)
HL = High - Low
HC = Abs(High - PrevClose)
LC = Abs(Low - PrevClose)
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