Measure the Noise

ATR has doubled over the last week. What do you know for certain?

• Price has fallen
• Price has risen
• Bars have been larger, in either direction

In Wilder's update with N = 5, how is the new ATR calculated?

• (previous ATR + current TR) / 2
• (previous ATR × 4 + current TR) / 5
• The average of the last 5 true ranges, recomputed from scratch