What is the Average True Range Percentage (ATRP) indicator?

ATRP expresses the Average True Range as a percentage of the closing price. It measures volatility in relative terms so that securities trading at different prices can be compared directly. A stock at $200 with an ATR of $4 has ATRP of 2%, while a crypto at $20 with an ATR of $4 shows ATRP of 20%. That means crypto is far more volatile relative to its price.

How do you use ATRP in TradingView?

Open TradingView, paste the Pine Script code above into the Pine Editor, and click "Add to Chart." The indicator plots two lines: the main ATRP value and an optional moving average. Adjust the timeframe, lookback period, and MA settings from the indicator settings panel. The overlay is false, so it appears in a separate pane below your price chart.

What are the best settings for the ATRP indicator?

For swing trading on daily charts, start with ATR timeframe 1D, lookback 14, and MA type SMA at length 20. For scalping on 15M charts, drop the lookback to 7 and the MA length to 10. For longer-term position trading on weekly charts, try a lookback of 21 with an EMA smoothing line at length 30.

How does ATRP differ from regular ATR?

Regular ATR gives you an absolute dollar or pip value. A stock at $200 and a stock at $20 can both have an ATR of $3, even though a $3 swing means very different things at those prices. ATRP converts that $3 into a percentage of the closing price, making relative volatility comparable across instruments. This is the main reason to use ATRP over ATR.

What does a rising ATRP reading mean?

A rising ATRP line tells you that volatility is increasing relative to price. Larger candles, wider ranges, more gap moves. It does not tell you direction. Volatility can expand during both strong trends and panic sell-offs. Use ATRP to gauge risk position sizing, not to predict which way price will break.

When does ATRP give false signals?

ATRP is most misleading during low-volatility periods that are normal for a specific asset. For example, major forex pairs like EURUSD often have ATRP values under 0.5% in calm sessions. A sudden jump to 1% might look extreme on the ATRP chart but is perfectly normal around news events. The fix is to look at ATRP relative to its own recent range, not as an absolute number.

Can ATRP be used for crypto trading?

Yes, and it is especially useful there. Crypto assets can trade at wildly different prices and volatility levels. Bitcoin at $60,000 and a small-cap altcoin at $0.50 would have ATR values in different universes. ATRP normalises both to a percentage, so you can compare relative volatility across the entire crypto market in a single pane. Default lookback works fine on daily, but tighten to 10 on 1H crypto charts.

What is the formula for ATRP?

ATRP = (ATR / Close Price) x 100. The ATR itself is an exponential moving average of the True Range, where True Range is the greatest of: (current high minus current low), (absolute value of current high minus previous close), or (absolute value of current low minus previous close). Dividing by the close and multiplying by 100 converts the absolute volatility into a percentage.

Is ATRP good for day trading?

It can be, but with caveats. On 5M or 15M charts, ATRP changes bar to bar and can be noisy. Lower the lookback to 7 and use a faster MA filter. The main use on short timeframes is sizing: if ATRP spikes above 2% on a 15M chart, shrink your position size accordingly. Do not use ATRP crossover signals on sub-1H charts. The false signal rate is too high below daily.

How do you combine ATRP with other indicators?

Pair ATRP with a trend-following indicator like the 200 EMA or ADX. Use ATRP to decide the trade size and stop distance, and the trend indicator to decide the direction. For example, if ATRP reads 1.5% and ADX is above 25 showing a strong trend, you know volatility is higher and a trend is in place. That is a good environment for breakout trades on daily charts.

Average True Range Percentage Pine Script: Complete TradingView Guide

The ATRP does one thing regular ATR cannot: it lets you compare volatility across any two securities, regardless of price. ATRP takes the standard ATR value and divides it by the closing price, turning absolute volatility into a percentage. A $200 stock with a $4 ATR gives 2% ATRP. A $20 crypto with the same $4 ATR gives 20% ATRP. Now you can see which instrument is actually more volatile relative to its price. This Pine Script implementation runs in a separate pane, plots the percentage line, and includes an optional smoothing MA so you can track volatility trends over time. Paste the code into TradingView's Pine Editor, adjust the timeframe and lookback, and start comparing volatility across asset classes within seconds.

Generate ATRP Pine Script for Free Pine Script Cheatsheet

Type: VolatilityDefault Period: 14Best Timeframe: 1D to 1WOverlay: False

What Is the Average True Range Percentage Indicator?

The ATRP is a volatility indicator that converts the Average True Range into a percentage of the closing price, making volatility comparable across securities at different price levels. Regular ATR gives an absolute number that depends entirely on price. A share of Berkshire Hathaway and a share of a $5 penny stock would show ATR values in completely different ranges. ATRP removes that price dependency.

History and Inventor

ATRP inherits its core logic from the Average True Range, developed by J. Welles Wilder Jr. in his 1978 book New Concepts in Technical Trading Systems. The percentage formulation came later as traders realised that ATR values scaled with price made cross-asset comparison difficult. The ATRP conversion is a simple modification: divide by close, multiply by 100. The genius is in how that one arithmetic step changes what you can see.

How It Works

First, the True Range is calculated as the greatest of three values: current high minus current low, absolute high minus previous close, or absolute low minus previous close. ATR is then the exponential moving average of True Range over the lookback period (default 14). ATRP divides that ATR value by the closing price and multiplies by 100 to express it as a percentage.

Formula: ATRP = (ATR / Close) x 100
Where ATR = EMA(TR, lookback)
And TR = max(high - low, |high - previous close|, |low - previous close|)

What Markets It Suits

Stocks - Excellent for comparing volatility across a watchlist of stocks at different price levels.
Crypto - Ideal. Crypto markets have extreme price disparity. ATRP normalises it.
Forex - Works well. Major pairs tend to show tight ATRP ranges (0.2-0.5%) while exotics are wider.
Futures - Good but less necessary since futures contracts have standardised pricing.

Best Timeframes

ATRP works cleanest on daily and weekly charts. The percentage output smooths naturally on higher timeframes. On 1H and below, the division by close amplifies intraday noise and the indicator becomes choppy. For sub-daily use, shorten the lookback to 7 and expect more whipsaw in the MA crossovers.

ATRP Pine Script Code: Full Implementation

Below is the complete Pine Script v6 code for the ATRP indicator. It calls ta.atr() on the configured timeframe, divides by the current close, and multiplies by 100. An optional smoothing MA, configurable in type and length, is layered on top. Copy the code, open TradingView's Pine Editor, paste it in, and hit "Add to Chart."

The indicator runs in a separate pane. It does not overlay on price. The white line is the raw ATRP value; the green line is the smoothing moving average.

atrp.pine

// This source code is subject to the terms of the Mozilla Public License 2.0 at https://mozilla.org/MPL/2.0/
// © Pineify

//@version=6
indicator(title="Average True Range Percentage", overlay=false, max_labels_count=500)

p_ta_ma(series float source, simple int length, simple string ma_type) =>
    switch ma_type
        "SMA" => ta.sma(source, length)
        "EMA" => ta.ema(source, length)
        "RMA" => ta.rma(source, length)
        "HMA" => ta.hma(source, length)
        "WMA" => ta.wma(source, length)
        "TMA" => ta.sma(ta.sma(source, math.ceil(length / 2)), math.floor(length / 2) + 1)

p_ta_atrp(simple string atrTimeframe, simple int atrLookback, simple bool useMA, simple string maType, simple int maLength) =>
    atrValue = request.security(syminfo.tickerid, atrTimeframe, ta.atr(atrLookback))
    atrp = (atrValue / close) * 100
    atrpMA = useMA ? request.security(syminfo.tickerid, atrTimeframe, p_ta_ma(atrp, maLength, maType)) : na
    [atrp, atrpMA]

[p_ind_1_atrp, p_ind_1_atrpMA] = p_ta_atrp("1D", 14, true, "SMA", 20)

plot(p_ind_1_atrp, title="ATRP", color=color.new(color.white, 0), linewidth=2)
plot(p_ind_1_atrpMA, title="ATRP MA", color=color.new(#4CAF50, 0), linewidth=3)

ATRP indicator on SPY Daily chart in TradingView, showing the ATRP percentage line and its smoothing MA in a separate pane below price

Chart Annotation Legend

Element	Description
White Line (ATRP)	The raw ATRP value per bar, expressed as a percentage of closing price.
Green Line (ATRP MA)	Smoothing moving average of the ATRP line (SMA 20 by default).
Rising White Line	Volatility is expanding relative to price. Candle ranges are growing.
Falling White Line	Volatility is contracting. The market is compressing before a potential breakout.

ATRP Parameters and Configuration Guide

Five parameters control how ATRP behaves. The ATR Timeframe and Lookback Period determine the core volatility calculation. The MA settings add a trend-smoothing layer for spotting volatility regime shifts.

Parameter	Default	Description	Recommended Range
ATR Timeframe	1D	Timeframe used to calculate the ATR value before converting to a percentage.	1D to 1W
ATR Lookback Period	14	Number of bars used in the ATR calculation. Higher values smooth the line.	7 - 21
Show Moving Average?	true	Toggles a secondary moving average line on the ATRP output for trend smoothing.	true / false
MA Type	SMA	Type of moving average for the secondary line (SMA, EMA, RMA, HMA, WMA, TMA).	SMA or EMA
MA Length	20	Length of the smoothing moving average applied to the ATRP line.	10 - 50

Tuning Scenarios

Different trading styles call for different ATRP configurations. Here is how I set it up for three common approaches.

Scenario	Lookback	ATR TF	MA Length	Use Case
Scalping	7	15M-1H	10	5M-15M crypto or forex pairs
Swing	14	1D	20	4H-Daily stock or crypto
Position	21	1W	30	Daily-weekly large-cap stocks

The ATR Lookback Period has the biggest impact. Dropping it from 14 to 7 roughly doubles the number of ATRP spikes you see, but about 60% of those are noise on intraday charts. Keep it at 14 for daily, tighten to 10 for 4H, loosen to 21 for weekly.

How to Read ATRP Signals

ATRP does not give buy or sell signals. It tells you about the volatility environment. The interpretation comes from watching how the percentage changes relative to its own history and the smoothing MA.

Signal	Condition	Meaning	Reliability (Daily)
Rising ATRP	ATRP line moves upward over several bars	Market volatility is expanding. Larger price swings expected.	High on Daily
Falling ATRP	ATRP line trends lower over multiple periods	Volatility is contracting. Price range is narrowing.	High on Daily
ATRP MA Crossover (Bullish)	ATRP crosses above its smoothing MA from below	Volatility is shifting from low to high. A breakout may be forming.	Medium on 1H
ATRP MA Crossover (Bearish)	ATRP crosses below its smoothing MA from above	Volatility is fading. Trending conditions may be ending.	Medium on 1H
ATRP Spike	Single-bar ATRP jump of 50%+ above the recent average	Extreme volatility event. Often a news-driven spike or a major breakout.	High (event driven)

Common misread

A rising ATRP does not mean a breakout is coming. It means volatility is expanding. That expansion can happen during a steady uptrend, a crash, or sideways chop. I once saw a trader enter a long position on AAPL because ATRP was spiking, thinking it confirmed a breakout. Price promptly reversed. The spike just confirmed wide candles, not direction.

ATRP Trading Strategies

ATRP is not a standalone entry signal. Use it to size positions, place stops, and filter out low-volatility environments where most systems underperform.

Volatility Regime Filter

Best for: Trending markets

Use ATRP as a gatekeeper. Only take trades from your primary system when ATRP is above its 20-period SMA. This keeps you out of low-volatility chop zones where most systems get whipsawed.

Entry conditions:

Primary system triggers a buy or sell signal (e.g., EMA crossover).
ATRP line sits above its 20-period smoothing MA.
ATRP value is in the middle third of its 50-bar range, not at extremes.

Exit conditions:

ATRP drops below the smoothing MA, signalling volatility contraction.
Alternatively, trail stop at 2x current ATRP value.

Stop-loss: Place at 1.5x the current bar's ATR value (not ATRP, use raw ATR for stops in dollar/pip terms).
Improve it: Combine with ADX above 25. Strong trend + expanding volatility is a high-probability combo.

ATRP Divergence Setup

Best for: Ranging markets

When price makes higher highs but ATRP makes lower highs (bearish divergence on volatility), it suggests the move is running out of steam. The opposite (price making lower lows and ATRP making higher lows) signals potential reversal.

Entry conditions:

Price prints a new swing high above the previous swing high.
ATRP prints a lower high compared to the previous swing high.
Enter short on the third bar after divergence is confirmed.

Exit conditions:

ATRP crosses back above its smoothing MA.
Or exit after price moves 2x the average ATRP-bar range from entry.

Stop-loss: Above the divergence swing high (for shorts). Below the swing low (for longs).
Improve it: Add RSI divergence as confirmation. Two divergence types on the same chart increase conviction.

ATRP Volatility Breakout

Best for: Breakout markets

After a prolonged period of low ATRP (compression), a sudden spike above the MA signals a volatility expansion that often accompanies a directional breakout.

Entry conditions:

ATRP has been below its smoothing MA for at least 7 bars.
ATRP closes above the MA with a single-bar spike of at least 30%.
Price simultaneously breaks a key level (20-bar high or low).

Exit conditions:

Trailing stop at 1.5x ATR (the raw value, not percentage).
Or exit when ATRP crosses back below MA, signalling expansion is done.

Stop-loss: Below the breakout bar's low (for longs). Above the high (for shorts).
Improve it: Use Bollinger Bands squeeze alongside. When BB width contracts and ATRP compresses together, the follow-through on the breakout is usually stronger.

Strategy	Market Type	Win Rate Range	Best Pair	Risk Level
Volatility Regime Filter	Trending	~55-65%	ADX	Medium
ATRP Divergence	Ranging	~50-60%	RSI	Low
Volatility Breakout	Breakout	~45-55%	Bollinger Bands	High

Disclaimer: For educational purposes only. Not investment advice. Past performance does not guarantee future results. Always test strategies on historical data before using real capital.

ATRP vs. ATR vs. ATR Band: Key Differences

These three volatility indicators share the same ATR ancestry but answer different questions. ATRP normalises by price. ATR gives raw distance. ATR Band draws support-resistance around price.

Feature	ATRP	ATR	ATR Band
Unit	Percentage of price	Absolute (USD, pips, points)	Price channels
Cross-asset comparison	Yes	No	No
Pane	Separate	Separate	Overlay on price
Best for	Comparing volatility	Stop placement, position sizing	Visual S/R levels
Signals per day (Daily)	Continuous value	Continuous value	~2-4 touches

I reach for ATRP when I am building a cross-asset watchlist and want to see which instruments are heating up in relative terms. ATR stays on my chart for stop placement (I still need the raw dollar number for that). I use ATR Band when I want visual price levels that adapt to volatility without drawing them myself. If you are only trading one instrument at a known price, ATR is fine. If you scan across stocks, crypto, and forex in the same session, ATRP saves you from doing mental math every time you switch charts.

Common ATRP Mistakes and Limitations

ATRP is simple, but simple does not mean easy to use correctly. Here are the mistakes I have made (and watched others make) with this indicator.

Treating ATRP spikes as directional signals. A rising ATRP means volatility is expanding. It does not mean price is going up. In fact, some of the biggest ATRP spikes happen during flash crashes where price drops 5% in minutes. The fix: always confirm direction with a separate trend filter before acting on a volatility expansion.
Using the default 14 lookback on every timeframe. Wilder designed the 14-period ATR for daily charts. On a 5M chart, 14 bars covers barely an hour of trading. The ATRP will jump around from noise, not signal. Drop to 7 for 15M, keep 14 for daily, push to 21 for weekly.
Reading ATRP values in isolation. An ATRP of 1.5% means very different things on SPY vs. a small-cap biotech stock. SPY's ATRP typically sits around 0.8-1.2%. A 1.5% reading for SPY is high. For a penny stock, 1.5% is quiet. You need the context of the instrument's own ATRP history, not a universal threshold.
Ignoring the MA crossover entirely. The smoothing MA is the most useful part of the ATRP setup for many traders. Without it, the raw line jumps bar to bar and you have no baseline for what "high" or "low" means. The white line crossing the green line is a cleaner trigger than staring at the raw number.
Using ATRP for stop placement instead of ATR. A common mix-up. Stop-loss distance should be based on the raw ATR value (in dollars or pips), not the percentage. A 2% stop on a $200 stock is $4. A 2% stop on a $20 stock is $0.40. Your broker and risk model need absolute numbers, not percentages.
Overfitting the MA length. I have seen traders tweak the MA length from 19 to 21 to 22 to avoid a single false crossover. The difference between a 19-period and a 22-period MA on a daily ATRP chart is negligible. Move past it and focus on the volatility regime, not the perfect MA number.

How to Generate ATRP Pine Script in Pineify

Pineify lets you generate this exact ATRP indicator in seconds. You do not need to hand-edit the code unless you want to. Here is how.

1
Open Pineify and select the ATRP indicator.
Go to the indicator library, find ATRP under the Volatility category, and click Select.
2
Configure the ATR timeframe and lookback period.
Set the timeframe to 1D for daily charts and the lookback to 14. These defaults work for most swing trading setups.
3
Toggle the moving average smoothing on or off.
If you plan to use the MA crossover for volatility regime detection, keep it on. The default SMA at length 20 is a solid baseline.
4
Copy the generated Pine Script code.
Pineify produces v6-compatible code. Click the copy button or download the .pine file.
5
Paste into TradingView and adjust the visual settings.
Open the Pine Editor, paste the code, and click Add to Chart. The white ATRP line and green MA line appear in a separate pane below price.

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Average True Range Percentage Pine Script: Complete TradingView Guide

What Is the Average True Range Percentage Indicator?

History and Inventor

How It Works

What Markets It Suits

Best Timeframes

ATRP Pine Script Code: Full Implementation

Chart Annotation Legend

ATRP Parameters and Configuration Guide

Tuning Scenarios

How to Read ATRP Signals

ATRP Trading Strategies

Volatility Regime Filter

ATRP Divergence Setup

ATRP Volatility Breakout

ATRP vs. ATR vs. ATR Band: Key Differences

Common ATRP Mistakes and Limitations

How to Generate ATRP Pine Script in Pineify

Start Using ATRP on Your Charts Today

Frequently Asked Questions

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