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Does the ATR formula use Wilders smoothing, or is it an SMA calculation?
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I've read that, internally, the ATR calculation uses Wilder's smoothing, but can't confirm this anywhere in the MS documentation. In fact, the docs seem mute, and it does make a difference especially when using ATR to set stops since recent volatility is more important than a simple average.
So, does ATR() use SMA, EMA or Wilder's?
Thanks.
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Hi,
This is correct, MetaStock's ATR does use Wilder's smoothing. This is not explicitly stated in the manual but we do reference the New Concepts in Technical Trading Systems and we coded the indicator into MetaStock following his definition.
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Great - thanks for the quick reply.
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Does the ATR formula use Wilders smoothing, or is it an SMA calculation?
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