UK Accounting Glossary
The daily price Range (High – Low) is often used as the basis for volatility indicators. However, there is an issue with using the price Range in that there can be a significant gap between the daily close and next open price that is not reflected in the calculation. The True Range overcomes this problem by incorporating the gap into the calculation.
The True Range is the difference between the True Range High and True Range Low.
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This glossary post was last updated: 25th March 2020.