Normalized Average True Range (NATR)
A normalized version of ATR that represents volatility as a percentage of price.
Usage
Use to compare volatility across different securities with varying price levels. NATR allows for normalized risk assessment and position sizing.
Background
Normalized ATR (NATR) was developed to allow traders to compare the volatility of high-priced stocks with low-priced stocks. By dividing the ATR by the closing price and multiplying by 100, the result is a percentage that can be used consistently across all assets. — TA-Lib Documentation
Parameters
timeperiod(default: 14): Smoothing period
Formula
[ NATR = \frac{ATR(n)}{Close} \times 100 ]