Range and volatility

How far an instrument moves, measured against its own normal. This is the group closest to what the True Range Research suite is built on.

1. 01
   What true range actually measuresHigh minus low undercounts any bar that opens away from the previous close. True range is the correction, and it is the measurement this company is named after.
2. 02
   Average True Range, and how it moves with the marketATR gives you the denominator. It is in the instrument’s own units, which makes it useless for comparing instruments and valuable for comparing one instrument to itself.
3. 03
   Extension: when a move has stretched past its own normalExtension measures distance from a reference in units of the instrument’s own volatility. It describes what has happened. It does not imply a snap back.
4. 04
   Compression, and what tight ranges tend to precedeVolatility clusters, so quiet periods make larger moves more likely. That says nothing whatsoever about direction, and the gap between those two statements is where people get hurt.
5. 05
   Gaps, and how they interact with rangeA gap is price moving while nothing traded. It inflates range measures, breaks reference levels, and behaves very differently in futures than in stocks.

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