ATR stands for Average True Range, ATR indicator is used to find the average (absolute) range for a specified period of time. So the value seen on this indicator is just the average range which can be used to know how much nifty future or any other stock can move in any direction. Let me clear this with an example: Suppose nifty future is in uptrend and today nifty future just bounced from the support level, now ATR shows a reading of 150 in nifty future weekly chart. This means that nifty future has an upside of at least 150 points in near term once its bounce from support level is confirmed. This is again very important mechanical indicator; this was tutorial of how you can use ATR for finding targets in Nifty future on weekly chart, traders can also use ATR indicator to place the stop loss by simple risk reward ratio.
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