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Other Common Indicators
There are countless indicators traders use on their charts. Below you can find more information on some of the more common ones.
Average True Range (ATR): The ATR is a measurement of market volatility. The higher the ATR, the higher volatility in the market. The ATR is typically calculated from the 14-day simple moving average. The formula can be found below, taken from Investopedia.
The screenshot from NinjaTrader below shows a chart with an ATR 14 on it. Looking at the chart, there was an increase in the ATR as volatility began to pick up (as seen by the bigger market moves). As volatility began to decrease, the ATR went down.
Volume Weighted Average Price (VWAP): The VWAP is a key indicator used by many traders to help determine a market’s trend or security’s value. It provides the average price a security has traded at based on its volume and price for that day. One way it can be used in day trading is with a support and resistance strategy, more info here. The VWAP formula can be found below, taken from Investopedia.
