NATR Node
Normalized Average True Range
Overview
NATR (Normalized ATR) expresses ATR as a percentage of the current price, making it directly comparable across different securities and price levels. A $2 ATR on a $100 stock (2% NATR) is equivalent to a $20 ATR on a $1000 stock.
This normalization enables portfolio-wide volatility comparisons and is essential for position sizing algorithms. High NATR indicates high percentage volatility, low NATR indicates tight trading ranges relative to price.
Formula
Parameters
| Parameter | Type | Default | Description |
|---|---|---|---|
| period | number | 14 | ATR lookback period |
Common Use Cases
1. Cross-Security Volatility Comparison
Compare volatility between $50 stock and $500 stock directly using percentage view.
2. Portfolio Position Sizing
Size positions based on NATR percentages rather than absolute point volatility.
3. Market Volatility Screening
Identify high NATR securities for swing trading or low NATR for scalping.
4. Stop Loss Sizing
Set percentage-based stops that account for each security's volatility profile.
Advantages & Limitations
Advantages
- •Direct cross-security comparison
- •Portfolio-wide positioning
- •Normalized percentage view
- •Includes gap risk via ATR
Limitations
- •Lagging due to ATR smoothing
- •Price sensitive (low prices inflates NATR)
Tips & Best Practices
📊 Portfolio Comparison
Compare NATR across your entire portfolio to identify relative volatility changes.
⚡ Percentage-Based Stops
Set stop distances as NATR multiplier (e.g., Entry ± 1.5 × NATR) across all positions.
💰 Establish Volatility Baselines
Calculate 100-bar NATR average for each security to identify current volatility regime.
⚠️ Watch for Penny Stock Distortion
Very low-priced stocks can show inflated NATR. Filter to quality names only.
Related Indicators
ATR
Base component - dollar-based volatility
Range Volatility
Alternative percentage-based measure
ADR
Average daily range in points
Volatility Index
Annualized volatility percentage