Definitions
In plain terms
It captures both intrabar range and overnight or interbar gaps in one nonnegative measure.
Technical
The calculation requires consecutive finalized bars, aligned adjustment basis, previous close, missing-gap policy, and valid OHLC.
Scope
It is a one-bar range measure and is not Average True Range.
Formula
TR_t = max(H_t-L_t, abs(H_t-C_(t-1)), abs(L_t-C_(t-1)))TR_t=\max(H_t-L_t,|H_t-C_{t-1}|,|L_t-C_{t-1}|)| Symbol | Meaning | Unit |
|---|---|---|
H_t | current high | price |
L_t | current low | price |
C_(t-1) | previous close | price |
Output unit: price
Examples
- A governed lesson calculates or identifies True Range only after its parameters, state, timing, and edge cases are declared.
Common misconceptions
- It is a one-bar range measure and is not Average True Range.
Concept relationships
Where this concept is used
Evidence and governance
- TA-Lib Directional Movement Index Implementation TA-Lib · first party technical publication
Supports: preferred label, short definition, technical definition, formula
Limits: Zero-denominator and compatibility behavior can differ from the Fintech Builder package and must be stated explicitly.
- Reviewed by
- fintech-builder-batch-007
- Last reviewed
- 2026-07-27
- Next review
- 2027-07-27
- Record status
- evidence reviewed
This record is evidence-reviewed and readable, but not yet promoted to published — it is served noindex,follow and excluded from the sitemap.