The Average True Range (ATR) is a technical analysis indicator that measures market volatility by decomposing the entire range of an asset price for a specific period. Developed by J. Welles Wilder, ATR calculates the average of true ranges over a set number of periods, typically 14. True range considers the highest and lowest prices during a period and the difference between the current close and the previous close, providing a comprehensive understanding of market movement. Traders use ATR to inform their strategies on trade entry and exit points, as well as position sizing.