What Is A Range ?

Trading ranges are characterized by the tendency of stocks to keep their movement bound within specific price points of a high (resistance) and a low (support) at varying periods.
Ranges are often a good indicator of market volatility as volatility is an outcome of price action.
The one that is directly proportional to volatility is range.
J. Welles Wilder Jr. (June 11, 1935 – April 18, 2021)
Range can be defined as the distance the price moves per increment of time.
New Concepts In Technical Trading Systems, 1978
The Daily Range


Daily Range Calculation In Google Sheets
STEP 1
Request 2 price points: Today’s high and Today’s Low
=GOOGLEFINANCE(B1,"high")

=GOOGLEFINANCE(B1,"low")

STEP 2
Calculate the Daily Range
=GOOGLEFINANCE(B1,"high")-GOOGLEFINANCE(B1,"low")

Complete.
Daily True Range



The True Range is defined as the maximum range that the price moved , either during the day or from yesterdays close to the extreme point reached during the day.
Suppose we have a stock with the following price points:
Yesterday’s Close = 70, Today’s High = 85, Todays Low = 75
Method 1 – Manual Calculation
Since we measuring the magnitude of the range and not the direction, we use the ABS() function to return positive values.
(D1) = Absolute Value of (Today’s High – Today’s Low)
= ABS (85 – 75)
= 10
(D2) = Absolute Value of (Today’s High – Yesterday’s Close )
= ABS (85 – 70)
= 15
(D3) = Absolute Value of (Yesterday’s Close – Today’s Low)
= ABS (70 -75)
= 5
True Range = MAX(D1, D2, D3)
= MAX(10, 15, 5)
= 15
Method 2 – Manual Calculation
Find the price difference between the extreme (Max & Min) values from the 3 price points.
True Range = MAX( Today’s High, Yesterday’s Close ) – MIN( Today’s Low, Yesterday’s Close )
= Max(85, 70) – Min(75, 70)
= 85 – 70
= 15
Note how for the MAX value, we only input “Today’s High” and “Yesterdays Close” and for the MIN value, we only input ” Today’s Low” and ” Yesterday’s Close”.
This is done to minimize the number of inputs required to calculate the True Range;
by using simple logic, we can conclude that “Today’s Low” cannot be higher than “Today’s High” therefore, there isn’t a need to include the price point when calculating for MAX value. The opposite will apply when calculating the MIN value; there isn’t need to include “Todays High”.
Daily True Range Calculation In Google Sheet
=MAX(GOOGLEFINANCE(B1,"HIGH"),GOOGLEFINANCE(B1,"CLOSEYEST"))-MIN(GOOGLEFINANCE(B1,"LOW"),GOOGLEFINANCE(B1,"CLOSEYEST"))
STEP 1
Request 3 price points: Today’s high, Today’s Low and Yesterdays Close
In our example, Cell B1 = “AMD”
STEP 1.1
Request Today’s High
=GOOGLEFINANCE(B1,"high")
![The formula fetches the Today's High [Captured on cell B9]](https://i0.wp.com/deusharvest.com/wp-content/uploads/2022/02/image-2.png?resize=340%2C173&ssl=1)
STEP 1.2
Request Today’s Low
=GOOGLEFINANCE(B1,"low")
![The formula fetches the Today's Low [Captured on cell C9]](https://i0.wp.com/deusharvest.com/wp-content/uploads/2022/02/image-3.png?resize=345%2C158&ssl=1)
The formula fetches the Today’s Low [Captured on cell C9]
STEP 1.3
Request Yesterday’s Close
=GOOGLEFINANCE(B1,"closeyest")
![The formula fetches the Yesterday's Close [Captured on cell D9]](https://i0.wp.com/deusharvest.com/wp-content/uploads/2022/02/image-5.png?resize=382%2C143&ssl=1)
STEP 2
Find the max and min values from the 3 price points collected in step 1
STEP 2.1
Find the max value between Today’s High and Yesterday’s close.
=MAX(GOOGLEFINANCE(B1,"HIGH"),GOOGLEFINANCE(B1,"CLOSEYEST"))

STEP 2.2
Find the min value between Today’s Low and Yesterday’s Close.
=MIN(GOOGLEFINANCE(B1,"LOW"),GOOGLEFINANCE(B1,"CLOSEYEST"))

STEP 3
Calculate the True Range
=MAX(GOOGLEFINANCE(B1,"HIGH"),GOOGLEFINANCE(B1,"CLOSEYEST"))-MIN(GOOGLEFINANCE(B1,"LOW"),GOOGLEFINANCE(B1,"CLOSEYEST"))

Complete.
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