Average True Range Band (Top) [ATRBandTop]

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The Average True Range Band (Top) function calculates the upper band of a moving average envelope for a field, using the average true range of the data series for the width of the envelope. Parameters ------------------ Close         The closing price of the security for each given day. High          The high price of the security for each given day. Low           The low price of the security for each given day. Period        The number of bars of data to include in the average, including the current value.                   For example, a period of 3 includes the current value and the two previous values.                   A period of 20 is recommended, while periods less than 10 may be significantly less useful. Width        The number of standard deviations to include in the envelope.                   A width of 2 is recommended. Note that non-integer and variable widths can be used. Indicator Value ------------------------ Average True Range Bands are a pair of values placed as an "envelope" around a data field. The values are calculated by taking the moving average of the data for the given period and adding or subtracting the specified number of average true range values for the same period from the moving average. Since Average True Range Bands use a moving average, the value at the beginning of a data series is not defined until there are enough values to fill the given period. Usage ----------- Average True Range Bands are useful for determining whether current values of a data field are behaving normally or breaking out in a new direction. For example, when the closing price of a security increases above its upper Average True Range Band, it will typically increase in that direction. Average True Range Bands are similar to Bollinger Bands and share many of their characteristics, but represent volatility using high and low, rather than the standard deviation of the one field. Source ------------ This indicator is based on the article "Average True Range or Standard Deviation" by Gordon Gustafson in the June 2001 issue of "Technical Analysis of Stocks and Commodities". The Average True Range was introduced by Welles Wilder in his book "New Concepts in Technical Trading Systems".