Observing the current price of a stock within a broader context is crucial for effective trading. While the current price offers a snapshot of value, it alone is insufficient for informed decision-making. By examining additional factors like price change, volatility, and momentum, a more comprehensive understanding of the current price behavior can be obtained.
Analyzing market data through scatterplots can provide a quick and comprehensive overview of the market. This method can help uncover patterns, correlations, and outliers that may have been overlooked when analyzing stocks.
Using the current price relative to daily true range indicator can provide valuable insights into a stock’s performance throughout the day. In this blog post, we explore how to use this tool to monitor a stock’s intraday performance, identify bullish or bearish signals, and gain a more comprehensive understanding of short-term price dynamics
Stock price Week-to-Date (WTD) return is a measure of the change in a stock’s price from the beginning of the current trading week to the current date. The WTD return is calculated by subtracting the stock’s previous week’s closing price from its current price and then dividing the result by the previous week’s closing price. The result is then expressed as a percentage, representing the stock’s WTD return
Month-to-date (MTD) stock price return is the percentage change in the stock price from the beginning of the current month to the current date. It is calculated by taking the difference between the stock price at the current date and the stock price at the previous month’s close and dividing that amount by the stock price at the previous month’s close.
The month-to-month return compares the value of a stock at the end of one month to the value of the stock at the end of the previous month.
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Using price volatility to measure price moves is based on the fact that daily price returns are meaningless without context. Therefore, short-term price history is required to understand the significance of a price change
The Normalized ATR extends the function of the ATR by being able to get a volatility measure that is directly comparable across stocks with different prices. This is accomplished by calculating the ATR as a percentage of the stock price.
The Average True Range is an indicator used to determine stock price volatility; it measures how much price moves on average over a given period. Welles Wilder introduced it in his book “New concepts in technical trading systems.
