Normalised ATR: volatility as a percentage of price
Why dividing ATR by price makes it comparable across instruments and across time, and what breaks when you do not.
Normalised ATR is free on Basis — the button opens a live crypto chart with it already applied. No account, no trial and no limit on how many indicators you add.
Open the chartWhat it measures
Normalised ATR divides the average true range by the closing price and expresses the result as a percentage.
That single division fixes the one real weakness of ATR: an absolute range figure is meaningless without knowing the price it came from.
It makes volatility comparable between instruments, and comparable for the same instrument across a period in which its price changed by an order of magnitude.
How it is calculated
These are the steps Basis performs, verified against the published definition.
- 1
Compute the average true range over the period as usual.
- 2
Divide by the current close.
- 3
Multiply by one hundred.
Settings
| Setting | Default | Range |
|---|---|---|
| Length | 14 | 1 – 500 |
Fourteen periods, inherited from ATR. The only decision beyond that is whether you want the absolute figure for stop placement or the percentage for comparison, and most workflows need both.
How to read it
- A reading of three percent means the instrument typically travels three percent of its price in a bar.
- It is directly usable for position sizing across a portfolio of instruments at wildly different prices.
- Comparing today against the same instrument two years ago is valid here and is not valid with raw ATR.
- Regime changes show up clearly: a market moving from one percent to four percent has fundamentally changed, and the raw ATR chart can hide that behind a price trend.
- It is the right input for a screener that ranks instruments by how much they move, since a raw ATR ranking simply sorts by price. Screening for a normalised ATR above a threshold finds genuinely active markets rather than expensive ones, which is almost always what was meant.
Where it misleads
Because the divisor is the current close, a sharp price decline raises normalised ATR even if the absolute range is unchanged — the same movement is a larger fraction of a smaller price. That is arithmetically correct and genuinely what you want for sizing, but it means a falling market always shows rising normalised volatility, and reading that as a volatility expansion when it is partly a price effect will make you size down twice for the same event.
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Updated 2026-08-22 · Educational reference, not financial advice.