True range

May 16, 2021
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The true range is different from the price range.

To calculate the price range, we only need to find the distance between high and low during a specific time.

But to calculate True range we should find the biggest distance between high(H), Low(L) and Previous close (Pc).

  1. Previous bar’s close (C.1)
  2. Current bar’s high (H)
  3. Current bar’s low (L)

True range is not a very useful indicator, however, Average True Range is widely used.

You can find more information about ATR here.

https://www.youtube.com/watch?v=vE0ZVu3W10A