ATR is good for day trading because it measures real-time volatility and helps you set stops, targets, and position sizes that match current market conditions.
Day traders use ATR to set price targets and adjust stop-loss levels because it reflects a market's average price movement over a chosen period.
Day traders often use 1.5x ATR or lower, accepting more frequent stops in exchange for tighter risk control.
The catch: ATR doesn't predict direction or signal entry points, it simply standardises volatility, so pair it with trend structure before pulling the trigger.