📏 Normalized Average True Range (NATR)

The ATR measures the volatility of a market in a specific period. It considers price gaps that can form between one day and the next. NATR can be more useful than the ATR when comparing different price levels. NATR adapts the Average True Range (ATR), allowing for comparisons across different securities and price points. It does this by calculating the ATR as a percentage of the closing price.

Formula: NATR = (ATR(period) / Close) * 100

Main uses: - Volatility-based reversal signals: use the NATR to identify potential reversals by monitoring significant differences in volatility - Trend confirmation: use directional changes in the NATR to confirm the strength of prevailing market trends