Technical Indicators · ATR

Volatility in price units. Gap-inclusive, honest.

ATR measures how much a market moves in a typical bar, including gaps. Vant8 uses it everywhere volatility matters in dollar terms — sizing stops, spacing grid levels, deciding whether a market is even worth running a strategy on.

What it measures

True range, smoothed

True range is the largest of (a) today's high minus low, (b) high minus the previous close, and (c) the previous close minus today's low. The high-minus-low component alone misses overnight gaps; the other two catch them. ATR is the Wilder-smoothed average of true range over a lookback window.

Intra-bar range

High minus low for the current bar. The simplest component.

Gap up

High minus the previous close. Catches an overnight pop.

Gap down

Previous close minus low. Catches an overnight drop.

Computation

Wilder's smoothing

TR = max(high − low, |high − prevClose|, |low − prevClose|)
ATR(period) = Wilder-smooth(TR, period)
The first ATR value is a simple average of TR; subsequent values use Wilder's recursive smoothing.
Defaults

The numbers we ship

ATR by itself is just volatility. The multipliers below are what turn it into stops, trails, and grid steps. These are tunable per strategy.

Period: 14

The textbook lookback. Long enough to be stable, short enough to react to a regime change in volatility.

Initial stop: 2 × ATR

Default stop distance below entry on momentum and trend-following strategies.

Trail: 3 × ATR (chandelier)

Default trailing stop, anchored to the highest close since entry — the chandelier convention.

Pyramid spacing: 0.5 × ATR

On Perp Trend Following, each add-on entry waits for a half-ATR move of confirmation past the prior fill.

Vant8-specific

ATR-percent feeds the Spot Grid scorer

Spot Grid AI cares about ATR as a percentage of price (ATR / close), not in raw price units. That percentage is the volatility component of the pair score, and it also feeds the profitability filter that rejects pairs where the grid step cannot cover round-trip fees.

ATR% as the volatility score

The scorer maps ATR% to a 0–100 score with the middle band (~2–3.5%) scoring best. Too low and the grid can't earn; too high and the range gets blown through.

Profitability filter

The recommended grid step has to clear twice the round-trip fee by a meaningful margin. If ATR% says the typical move is smaller than that, the pair is refused regardless of its score elsewhere.

Where it shows up

Strategies that consume ATR

Momentum
Stop sizing — initial stop placed two ATRs below entry; trail by three ATRs above the highest close since entry.
Perp Trend Following
Stop sizing + pyramid spacing — stops sized in ATRs; adds at fixed ATR intervals as the trend extends.
Perp Mean Reversion
Sanity check — refuses entry if ATR-implied range exceeds the band the strategy assumes.
Risk Management
Position sizing — converts a dollar-risk budget into a quantity using the per-symbol ATR.
Spot Grid AI
Pair scoring + grid step — feeds the volatility score and sizes the grid step so cycles can cover fees.
How to read it

Where ATR can mislead you

No direction

ATR tells you how big a typical move is. It does not say up or down. Combine with direction-aware indicators (MACD, MA Cross) before acting on size alone.

Lags a regime change

A sudden jump in volatility takes the smoothed average a few bars to absorb. Stops sized today reflect the volatility of the last 14 bars, not the next 14. Catastrophic moves still happen between bar closes.

Pick a strategy that uses ATR.

The strategies listed above are deployed from the Strategies page on your dashboard. Each one ships with sensible defaults you can tune before deployment.