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The ATR indicator, or Average True Range indicator, is an indicator that measures volatility. As such, it is not a trend following indicator. It is possible for volatility to be low or high during a trend. What the handstand is really good at is identifying potentially explosive breaking moves. As a measure of volatility, ATR is also used by traders to set a stop loss on their trades. This makes it possible to take into account the volatility of a given market and to avoid being stopped too quickly.
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