| Average True Range
Also referred to as the Trading Range, this system was
introduced by J. Welles Wilder Jr. in his book "New Concepts in
Technical Trading Systems." Wilder has found that high Average True
Range values often occur at market bottoms following a "panic" sell-off.
Low Average True Range values are often found during extended
sideways periods, such as those found at tops and after
consolidation periods.
The True Range indicator is the greatest of the following:
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The price difference from today's high to today's low.
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The price difference from yesterday's close to today's high.
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The price difference from yesterday's close to today's low.
The Average True Range is an exponential moving average (typically 7-days) of
the True Ranges.
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