The science of trading market momentum for stocks, options, futures and bonds. Our critical day analysis is all about trend reversals. The daily range of any tradable gives a better sense of enthusiasm of buyers and sellers, valuation beliefs, and the variety of market forces that may contribute to market price action in the future.
Daily range is the difference between the high and low in one trading day.
An increase in daily range invites speculation as to the reasons behind increasing volatility for the tradable and contributes to forecasts of what is possible near term. It is an important input into the valuation forecasts of options and other derivative products. One indicator developed to track the range in daily prices for a tradable is the Average True Range. The distance from today's high to today's low. The distance from yesterday's close to today's high.