Traders View Non-AMP

Simplifying Crypto Volatility Assessment with ATRP

Published by
Qadir AK and Mustafa Mulla

The Average True Range (ATR) is a widely-used indicator in crypto trading. It is great for understanding how volatile a specific cryptocurrency is. However, there is a serious limitation with ATR. You cannot easily compare the volatility of one cryptocurrency to another using ATR because the ATR value depends on the price of the cryptocurrency. 

To overcome this limitation, we have another indicator called the Average True Range Percentage (ATRP). This indicator helps us compare the volatility of different cryptocurrencies and find out which one is more volatile. Let’s learn more about ATRP.

1. Average True Range Percentage: What’s It

ATRP is a tool which is getting more and more popular day by day. Though it is majorly used in cryptocurrency trading to measure and compare how volatile different cryptocurrencies are, it has limitless possibilities. 

In short, ATRP is useful for making informed decisions when choosing which cryptocurrencies to trade based on their relative volatility.   

2. ATRP: How Does It Works

The Average True Range Percentage indicator works by representing the ATR indicator as a percentage. This approach enables crypto traders to assess the volatility of various cryptocurrencies, regardless of their varying token prices. For instance, without ATRP, it might wrongly appear that a less expensive cryptocurrency is less volatile than a more costly one, solely due to its lower ATR value. In simple terms, ATRP evens the comparison field, simplifying the assessment of volatility in the realm of crypto trading.

3. How To Calculate ATRP

Calculating ATRP is simple. There is a simple formula for that.

ATRP = (Average True Range / Close) * 100

To calculate ATRP, divide the Average True Range by the closing price of the cryptocurrency and then multiply the result by 100. 

4. Launching ATRP on a TradingView chart: Step-By-Step Guide

  • Open your TradingView chart
  • Click on the indicator button
  • In the search bar, type ‘ATRP’
  • Click on ‘Average True Range Percentage’, when it appears in the list
  • You can adjust its settings if needed
  • Click the ‘OK’ button
  • Start using ATRP for analysis \

5. How to use Average True Range Percentage

ATRP helps crypto traders assess and compare the volatility of cryptocurrencies. A higher ATRP indicates greater price swings, making it useful for risk management and trade decision-making.

For instance, if ATRP is high, it may be riskier to enter a trade. 

Endnote

ATRP is a valuable tool in cryptocurrency trading. It assists traders in understanding and comparing the volatility of different cryptocurrencies, aiding in informed decision-making. However, it is important to note that ATRP has limitations. Anyway, balancing risk and reward is crucial for success in the dynamic world of crypto trading. 

Qadir AK and Mustafa Mulla

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

Recent Posts

Gate Dubai Secures Full Operational Licence from VARA for Crypto Exchange Services

Gate Group has officially announced that its subsidiary, Gate Technology FZE (“Gate Dubai”), has been…

April 29, 2025

FTX Takes Legal Action Against Token Issuers Over Unprovided Assets

FTX has launched legal action against NFT Stars Ltd. and KUROSEMI INC. (d/b/a Delysium) for…

April 29, 2025

Visa, Mastercard, and Stripe Fuel Stablecoin Revolution in Global Finance

Stablecoins are rapidly evolving from a niche segment in the crypto world to a key…

April 29, 2025

With Integrated Off-Ramps, We Can Finally Say Goodbye To Long Crypto Cash-Out Delays

Cryptocurrency has a reputation for being a bit too technical, especially for someone who’s never…

April 29, 2025

Banks May Turn to Ripple’s XRP Amid Crisis, Predicts CEO of Black Swan Capitalist Versan Aljarrah

Big financial trouble could be coming, and many believe banks already see it coming. Some…

April 29, 2025

SEC To Declare XRP as Official US Strategic Reserve Asset? Community Says ‘Fake News’

A viral fake rumour swept the internet yesterday, and the crypto community did not keep…

April 29, 2025