true range

True Range (TR)

Welles Wilder described these calculations to determine the trading range for a stock or commodity. True Range is defined as the largest of the following:

  • The distance from today's high to today's low.
  • The distance from yesterday's close to today's high.
  • The distance from yesterday's close to today's low.

Wilder included price comparisons among subsequent bars in order to account for gaps in his range calculation.