ATR (average true range): what it is and how a reading uses it
In Meridian Engine analyses ATR is used to measure, not to predict: it says how deep a sweep is, or how tight a band is, compared with the instrument’s normal movement at that moment.
Updated 2026-10-04
This page explains a term of the method and how to check it against public data. It does not say what to do in any market.
Definition
The average range of a bar over a fixed number of bars: it measures volatility, in the instrument’s price units.
For each bar you take the true range, the largest of three values: high minus low, the distance between the high and the previous close, the distance between the low and the previous close. ATR is the average of these values over the last bars, usually 14, on the reading’s timeframe. It is expressed in price: dollars per ounce for gold, dollars for BTCUSD.
How a reading uses it
In three ways, always to compare. Every ATR value quoted in a card states the timeframe and the price series it is computed from.
- the depth of a sweep, in multiples of ATR: how far price went beyond a level compared with the average move of one bar;
- the width of a band against ATR: a band of about one ATR describes a market at rest;
- the ATR percentile: where today’s volatility sits against the observed period, from 0 (the most compressed) to 100 (the widest).
ATR does not say which way price will go: it says how much it moves, not where.
Three examples from published readings
Price locked in a band of about 100 points, 64,886.5–64,986.9, about 1.3 times the 14-period hourly ATR: an almost motionless market. Values in the reading’s card.
The day before, price had swept the equal lows at 4,291.3 with an excursion of 0.87 times ATR. At issue volatility was compressed: ATR percentile 0 on the four-hour chart and 2 on the hourly one. Values in the reading’s card.
The hourly sweep of 30 September at 13:00 UTC was 1.28 times ATR deep: the deepest in the observed window. Values in the reading’s card.
How to compute it yourself
Almost every charting platform has the 14-period ATR indicator. To redo the calculation on public hourly bars, compute the true range of each bar and average the last 14. Values can differ slightly between feeds and between averaging methods, which is why every reading states the price series it uses.
Related terms
Band · Liquidity pool · Sweep · Displacement · Drift · Shelf
Published readings
Three complete analyses, with the conditions written in advance and the outcome checked against public data:
BTCUSD, 9 August 2026 · XAUUSD, 24 September 2026 · BTCUSD, 1 October 2026 (no trade)
Every Meridian Engine analysis records direction, entry, stop, targets and invalidation before the move; the outcome is checked afterwards on the public price series named on each card, losses included. Waitlist members receive one complete card a week by email; terms are announced at launch.
Get the next analysis →General information only. Not an instruction to buy or sell.