True Range is a measure of volatility that takes into account gaps between trading sessions. It is the greatest of the following: current high less the current low, the absolute value of the current high less the previous close, and the absolute value of the current low less the previous close.

How is True Range different from Range?

The standard Range is simply the High minus the Low. True Range provides a more accurate measure of volatility by including any gaps from the previous closing price.

How is True Range used in trading?

True Range is the building block for the Average True Range (ATR) indicator. Traders use it to assess volatility, set stop-loss levels, and determine position sizes.

True Range Calculator

Accurately measure market volatility by calculating the True Range. Essential for setting stop losses and understanding price movement potential.

Calculate True Range

Enter the current High, Low, and Previous Close prices.

Current High Price

Current Low Price

Previous Close Price

What is True Range?

True Range (TR) is a technical analysis indicator developed by J. Welles Wilder Jr. to measure the volatility of an asset. Unlike the standard range (High - Low), True Range accounts for gaps that may occur between the previous day's close and the current day's open.

It provides a more accurate picture of market activity, especially for assets that gap frequently, such as stocks reacting to earnings reports or commodities reacting to news.

The Formula

The True Range is calculated as the greatest of the following three values:

Method 1: Current High minus Current Low (H - L)
Method 2: Absolute value of Current High minus Previous Close (|H - Cp|)
Method 3: Absolute value of Current Low minus Previous Close (|L - Cp|)

Where:
H = Current High
L = Current Low
Cp = Previous Close

Why True Range Matters for Traders

Understanding volatility is crucial for risk management. Here's why professional traders calculate True Range:

Better Stop Losses: Volatility-based stops (like Chandelier Exits or ATR Trailing Stops) use True Range to place stops outside the "noise" of normal market movement.
Position Sizing: Highly volatile assets require smaller position sizes to maintain the same risk profile. True Range helps quantify this volatility.
Breakout Confirmation: A breakout accompanied by an expansion in True Range suggests strong momentum and conviction behind the move.

How to Use This Calculator

Enter the High price of the current candle or session.
Enter the Low price of the current candle or session.
Enter the Close price of the previous candle or session.
Click Calculate to get the True Range value.

Did you know?

The Average True Range (ATR) is simply a moving average of the True Range values over a specific period (usually 14 days). While True Range measures volatility for a single period, ATR smooths it out to show the volatility trend.

Frequently Asked Questions

What is a good True Range value?

There is no single "good" value as it depends on the asset's price. A $10 stock might have a TR of 0.50, while a $2000 stock might have a TR of 50.00. Always look at TR relative to the asset's price (as a percentage) or compare it to its historical average.

Can True Range be negative?

No. Since True Range uses absolute values for the gap calculations and the High is always greater than or equal to the Low, the result is always a positive number or zero.

Does this work for crypto and forex?

Yes! The True Range calculation is universal and works for any asset class including stocks, cryptocurrencies, forex pairs, and commodities.

Automate Volatility Analysis with Pineify

Tired of calculating volatility manually? Use Pineify to generate custom TradingView indicators that automatically track True Range, ATR, and volatility-based stops in real-time.

Build Custom Indicators Free