Technical
14-day Average True Range
ATR 14d
What it is
ATR measures the average daily volatility over 14 days in dollars. An ATR of $5 means the stock moves on average $5 per day (up or down). It's not a direction — it's an amplitude.
How to read it
Mainly used to size stops and positions. A stop at 2× ATR below the buy price is a standard: wide enough to ignore noise, tight enough to limit losses. When ATR explodes, something's happening — earnings, news, panic.
Common reference points
- Low volatility — calmATR < 1% of price
- Normal volatility1 – 3% of price
- Elevated volatility — caution3 – 5% of price
- Extreme volatility — stress> 5% of price
Orders of magnitude, not a rule: the same number does not mean the same thing from one sector to the next.
What it does not tell you
ATR says NOTHING about direction — only amplitude. A rising ATR can accompany a sharp rally or a sharp drop. Always cross with the trend.
Other measures — Technical
Educational content. Polaris is not a registered investment adviser and makes no recommendation.