BRVX Glossary · Average true range (ATR) · Updated September 25, 2026
Average true range (ATR) is a volatility indicator that measures how much an asset typically moves per period, including gaps. Introduced by J. Welles Wilder in 1978, it is usually averaged over 14 periods and expressed in price units, not percent.
The formula
True range max(H − L, |H − Cprev|, |L − Cprev|) ATR average of true range, 14 periods
ATR is the average size of a candle, counting any gap from the previous close.
How it works
- True range Largest of 3
- Average 14 periods
- ATR Price units
On this page
How traders use ATR
- Stop distance: e.g. 1.5–2 × ATR from entry, so noise does not trigger it.
- Position size: risk ÷ (ATR multiple) gives a size that adapts to volatility.
- Trailing stops: the chandelier exit trails 3 × ATR from the high.
- Filtering: skipping markets whose ATR is too small to cover costs.
Worked example
If BTC's 14-day ATR is $2,000 and you use a 1.5 × ATR stop, the stop sits $3,000 from entry. Risking $300 means a position of 0.1 BTC — whatever leverage is used to open it.
ATR also helps compare quiet and busy periods of the same market: a BRVX market whose ATR has doubled in a week needs a stop twice as wide, or a position half as large, to carry the same risk.
What ATR does not tell you
ATR has no direction: a rising ATR can come with a rally or a crash. It is in price units, so compare markets with ATR as a percentage of price instead.
On BRVX
On BRVX, ATR sets stop distance and liquidation sets how far that stop can be: at 10x on BTC/USDT, liquidation is about 7.81% away. If two ATRs exceed that distance, the leverage is too high for the stop the market needs.
Questions about Average true range (ATR)
What is a good ATR value?
There is no universal value; ATR is compared with the asset's own history and price.
What period is ATR usually set to?
14 periods, the default Wilder used.
Does ATR show trend direction?
No. It measures the size of moves, not their direction.
Average true range (ATR): next steps on BRVX
Average true range (ATR) on NEAR/USDT: weekend candles included, leverage 5x to 100x, 0.05% to open and 0.05% to close.
Read next: Volatility, Stop-loss and Trailing stop.
Leverage works both ways: a small move against you can lose you the whole margin.
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