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<p id="isPasted">Average True Range is one of a number of technical analysis tools developed by Welles Wilder. Some of the others include the Relative Strength Index, Average Directional Index and the Parabolic SAR.</p><p>ATR Bands focus on the degree of price volatility in a stock. They can be used to time the entry into trades and help with setting volatility-based stop-losses.</p><p>True Range is calculated by looking at the daily price change and using the greater of three calculations: (high – previous close), (previous close – low) or (high – low).</p>