NATR (Normalized Average True Range)

Indicator Description

NATR (Normalized Average True Range) is a normalized version of ATR, which eliminates the influence of price levels by dividing the ATR value by the price, allowing for comparison between assets at different price levels.

Function Information

  • Function Name: NATR
  • Input Parameters: High, Low, Close
  • Parameter Settings: timeperiod (default: 14)
  • Output: NATR value

Calculation Principle

NATR is calculated using the following formula:

True Range = max(High - Low, |High - Previous Close|, |Low - Previous Close|)
ATR = SMA(True Range, timeperiod)
NATR = (ATR / Close) * 100

Where:

  • High is the highest price
  • Low is the lowest price
  • Close is the closing price
  • SMA is Simple Moving Average
  • timeperiod is the calculation period

Usage Scenarios

  1. Cross-asset volatility comparison
  2. Relative volatility analysis
  3. Market state assessment
  4. Trading strategy optimization

Usage Recommendations

  1. Larger NATR values indicate stronger relative volatility
  2. Smaller NATR values indicate weaker relative volatility
  3. Can be used to compare assets at different price levels
  4. Use in conjunction with other indicators
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