Average True Range Strategy for Binary Options

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The Average True Range or the ATR, is a measure of volatility introduced by Welles Wilder in his book: “New Concepts in Technical Trading Systems”

The True Range Indicator is greatest of the following:

  • Current high less the current low.
  • The absolute value of the current high less the previous close.
  • The absolute value of the current low less the previous close.

The Average true range is a moving average (generally 14-das) of the True Ranges. Weles Wilder originally developed the ATR for commodities but it can also be used in binary options trading, as a measure of volatility in currencies/forex. Thus as a binary options strategy, the ATR could be used to measure how volatile a currency pair or a trading asset will be volatile in a given period of time.



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