Learn the stock market › Indicators › Lesson 5 of 7
What is ATR?
Tesla: ATR as a share of the price, five years
ATR, % of the price
How it is worked out
Each day has a range between its high and its low. But a stock can also open far from yesterday's close, and that range misses it. So true range takes the largest of three numbers: high minus low, high minus yesterday's close, and yesterday's close minus low.
ATR is a smoothed average of true range, most often over 14 days. J. Welles Wilder developed it for commodities, where prices often jump. Here are the last three days for Tesla.
Nov 5, 2026: high 374.30, low 338.15, the close the day before 385.19. True range: 47.04
Nov 6, 2026: high 363.84, low 347.60, the close the day before 343.69. True range: 20.15
14-day ATR, smoothed: 16.71, or 4.7% of the price
How much the largest companies move
ATR in dollars can't be compared between companies, because the shares cost different amounts. Divided by the price, it can. The table shows the middle of the last year's readings, ATR right now, and the same number in dollars.
| Company | Middle, last year | ATR now | In dollars |
|---|---|---|---|
| AMD | 5.2% | 8.2% | 36.61 |
| Oracle | 5.1% | 7.3% | 8.51 |
| Palantir | 4.8% | 6.0% | 9.67 |
| Broadcom | 4.0% | 5.0% | 14.75 |
| Tesla | 3.8% | 4.7% | 16.71 |
| Nvidia | 3.3% | 4.2% | 7.77 |
| Meta | 3.3% | 4.0% | 24.15 |
| Eli Lilly | 3.1% | 3.5% | 47.35 |
| Netflix | 3.0% | 3.2% | 2.06 |
| Amazon | 2.7% | 3.5% | 9.19 |
| Alphabet | 2.7% | 3.8% | 10.68 |
| Microsoft | 2.4% | 2.9% | 15.44 |
| Exxon Mobil | 2.3% | 2.9% | 4.74 |
| Apple | 2.2% | 2.6% | 8.77 |
| Walmart | 2.2% | 2.5% | 3.09 |
| Mastercard | 2.1% | 2.3% | 15.03 |
| JPMorgan Chase | 2.1% | 2.4% | 8.04 |
| Visa | 2.0% | 2.2% | 9.27 |
| Costco | 1.9% | 1.9% | 20.26 |
| Berkshire Hathaway | 1.4% | 1.6% | 9.41 |
The middle of the companies is at 2.7%. The highest is AMD at 5.2%, and the lowest Berkshire Hathaway at 1.4%.
The close usually moves less than ATR, because the range counts the whole day. On an ordinary day the close moved 0.4 ATR, and on 14% of days more than a whole ATR.
The number changes with the market
The middle of the companies is at 3.4% now. Since 2010 it was highest at 7.6%, on Mar 23, 2020, and lowest at 1.1%, on Apr 27, 2017. So an ATR from a calm period says little about a turbulent one.
What the number says, and what it doesn't
ATR gives no signal, so there is nothing to test against an ordinary day. It has no direction: a high number can come from big rises just as well as big falls. It only describes volatility, how much the price moves, and says nothing about the cause.
The number is often used to set a distance, such as how far under the purchase price a stop sits. The position size calculator works from that distance, and this article goes through ATR and risk.
Test yourself
Two stocks both have an ATR of $5. One costs $50 and the other $500. Which moves the most relative to its price?
More numbers are on the Tesla stock page.
Sources
- StockCharts ChartSchool, Average True Range: who developed it and the calculation, read on 5 November 2026.