Average True Range

“One of the easiest measures of volatility that you can plot on a screen in a very simplistic manner is true range.”

In this clip from his webinar Choose an Effective Bar Length for Trading, Dean of Kase & Company explains what true range is and why it is so important to determining levels for stops and choosing an appropriate bar length.

As Dean explains, true range is the maximum distance between two bars. This information is used in many technical indicators and as a basic measure of volatility. Identifying variations in the distribution of volatility can reveal the level of risk associated with a market at any given time.

Learn more in this 4-minute video:

Enjoy this clip? Check out our other trading videos Buy & Sell Signals and How to Use Volume Profile!