Overview

Enterprise Edition Only Feature.

The Average True Range is an indicator that measures commitment, and compares the range between the High, Low and Close prices. This indicator was developed by J. Welles Wilder.

Note
We recommend that you read Using Financial Formulas before proceeding any further. Using Financial Formulas provides a detailed explanation on how to use formulas, and also explains the various options available to you when applying a formula.

Figure 1: The Average True Range in the lower chart area, and the High, Low, and Close prices in the upper chart area as a stock chart.

Applying Average True Range

The following table lists the parameters used in the FormulaFinancial method to calculate an Average True Range, and also supplies a description of what these parameters mean:

Parameter	Value/Description	Example
Formula Name:	AverageTrueRange	FormulaFinancial(FinancialFormula.AverageTrueRange,"15",_ "Series1:Y,Series1:Y2,Series1:Y4","Series3:Y")
Input Values:	Value #1: The value which represents the High price (by default this is the first Y value in the stock chart). Value #2: The value which represents the Low price (by default this is the second Y value in the stock chart). Value #3: The value which represents the Close price. By default this is the fourth Y value in the stock chart.	FormulaFinancial(FinancialFormula.AverageTrueRange,"15", _ "Series1:Y,Series1:Y2,Series1:Y4","Series3:Y")
Output Value: (optional)	The Average True Range. If not specified output is stored in the first input value.	FormulaFinancial(FinancialFormula.AverageTrueRange,"15", _ "Series1:Y,Series1:Y2,Series1:Y4","Series3:Y")
Parameter: (optional)	Period, used to calculate the Average True Range (Default value is 14).	FormulaFinancial(FinancialFormula.AverageTrueRange,"15", _ "Series1:Y,Series1:Y2,Series1:Y4","Series3:Y")

A line chart is a good choice when displaying an Average True Range series.

Financial Interpretation: High Average True Range values often occur at market bottoms due to extensive panic sell. Low Average true range values are characteristic with market tops.

Calculation: To find the Average True Range it is first necessary to find the True Range. Finding the True range is done in this manner:

True Range = MAX( |High(today) - Low(today)|, |Close(yesterday) - High(today)|, |Close(yesterday) - Low(today)|)

The Average True range is calculated as a Simple Moving Average of True Range.

Example

This example demonstrates how to calculate the Average True Range.

Visual Basic Copy Code

Visual Basic	Copy Code
`Imports Dundas.Charting.WinControl ... With Chart1.DataManipulator ' Calculates Average True Range indicator. Input Values are High, Low and Close. .FormulaFinancial(FinancialFormula.AverageTrueRange,"15","Series1:Y,Series1:Y2,Series1:Y4","Series3:Y") End With`

Imports Dundas.Charting.WinControl
  ...
  
With Chart1.DataManipulator
' Calculates Average True Range indicator. Input Values are High, Low and Close.
.FormulaFinancial(FinancialFormula.AverageTrueRange,"15","Series1:Y,Series1:Y2,Series1:Y4","Series3:Y")
End With

C# Copy Code

C#	Copy Code
`using Dundas.Charting.WinControl; ... // Calculates Average True Range indicator. Input Values are High, Low and Close. Chart1.DataManipulator.FormulaFinancial(FinancialFormula.AverageTrueRange,"15","Series1:Y,Series1:Y2,Series1:Y4","Series3:Y");`

using Dundas.Charting.WinControl;
  ...
  
// Calculates Average True Range indicator. Input Values are High, Low and Close.
Chart1.DataManipulator.FormulaFinancial(FinancialFormula.AverageTrueRange,"15","Series1:Y,Series1:Y2,Series1:Y4","Series3:Y");

Dundas Chart for Windows Forms
Average True Range Formula
See Also Send comments on this topic.

Overview

Applying Average True Range

Example

See Also