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AT: Here's why ATR is a horrible indicator
Read time: 2 minutes Let’s talk about a trading mistake that’s costing traders money every day. A lot of traders rely on ATR (Average True Range) to gauge how far a stock can move in a day. It sounds logical—ATR calculates the average range based on historical price action, using highs, lows, and closing prices. But here’s the problem: ATR is completely backward-looking. It doesn’t factor in implied volatility (IV), which is forward-looking. It doesn’t account for market events like earnings,...