Is there an indicator that shows the average daily movement of a stock over a period of time, say 14 days. For example. How many points per day did stock X move (on average) over the last 14 days?
Looking for an indicator....
- Thread starter marc82much
- Start date
You mean the average true range?
Sure, the average true range indicator (ATR), available in most charts. Its default value is 14 days, just what you are looking for
https://www.investopedia.com/terms/a/atr.asp#:~:text=The average true range (ATR,Concepts in Technical Trading Systems."
Oh, OK. Thanks. Easy when you know how. I had it on my GOOG chart and it show an ATR of 3.3 which makes no sense. Then I realized it was a 5m chart, and maybe I should change it to 1 day / 1 year (TOS) and lo and behold the ATR shows 37.0923. That seems more like it. So, if I put it on a 5m chart, does that mean the movement is 3.3 for every five minute period? On a 1m chart the ATR is 1.98. So, if I want to know approximate movement, I can set my chart to daily and read the ATR, is that correct?
Yep, that means Google's average range is $3.3 for the last 14 periods on the 5min chart.
You nailed it.
You are quite welcome Marc.
Another one is keltner channels. Their based off ATR. I use a 20 day moving average with bands 2-2.5 ATR off it.
Helps visualize when things go parabolic. Part of any candle/bar will 95% or more be in the bands. When you start getting prices well above the bands then I’m looking to exit trades very aggressively or avoiding new trades.
Not your question but does give an idea of changes in range and volatility.
Helps visualize when things go parabolic. Part of any candle/bar will 95% or more be in the bands. When you start getting prices well above the bands then I’m looking to exit trades very aggressively or avoiding new trades.
Not your question but does give an idea of changes in range and volatility.
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I see your points.
And a good/very trending market can close 5or 6 months outside the bands;
some times more than that-- but not a real common pattern/especially with QQQ/SPY...…..
Absolutely, if used in conjunction with price action analysis, Keltner bands (or channels) can deliver powerful trend-following buy/sell signals.
As a side note, ATRs (average true range) are usually used as trailing stops during an uptrend or a downtrend.
For example the trader can exit an uptrend if the price drops 3 ATR (or some other optimal value).
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One can sell late or sell early. With a good profit cushon I like late exit/ but depends on market.
NOT every trend closes 5 or 6 months outside Keltner channels/bands but some do.