ATR% | Volatility Normalizer

This indicator measures true volatility by expressing the Average True Range (ATR) as a percentage of price. Unlike basic ATR plots, which show raw values, this version normalizes volatility to make it directly comparable across instruments and timeframes.

How it works:

Uses True Range (High–Low plus gaps) to capture actual market movement.

Normalizes by dividing ATR by the chosen price base (default: Close).

Multiplies by 100 to output a clean ATR% line.

Smoothing is flexible: choose from RMA, SMA, EMA, or WMA.

Optional Feature:
For comparison, you can toggle an auxiliary line showing the average absolute close-to-close % move, highlighting the difference between simplified and true volatility.

Why use it:

Track regime shifts: identify when volatility expands or contracts in % terms.

Compare volatility across different markets (equities, crypto, forex, commodities).

Integrate into risk management: position sizing, stop placement, or volatility filters for entries.

Interpretation:

Rising ATR% → expanding volatility, potential breakouts or unstable ranges.

Falling ATR% → contracting volatility, possible consolidation or range-bound conditions.

Sudden spikes → market “shocks” worth paying attention to.