The True Range (TR) indicator measures the actual price movement of a symbol during a single period. It captures the largest distance between price points, ensuring that both intraday price movement and market gaps are included in the calculation.

For automated trading strategies, True Range helps identify how much the market moved in a given period, which is useful when building triggers that depend on volatility or price expansion.

What does the True Range indicator measure?

True Range determines the largest price movement among three possible values:

• The difference between the current high and current low
• The difference between the current high and the previous close
• The difference between the current low and the previous close

By selecting the largest value among these, the indicator captures all meaningful price movement, including overnight gaps or sudden price jumps.

In general:

• Higher True Range values indicate stronger price movement during that period
• Lower True Range values indicate smaller price movement

This helps traders understand the actual range of price movement during each timeframe.

How True Range is used in indicator-based triggers

In automation, True Range can be used to detect periods when price movement expands significantly.

For example, automated strategies may monitor when:

• True Range crosses above a defined value, indicating unusually large price movement
• True Range moves relative to another indicator, helping confirm volatility expansion before triggering a strategy

These types of conditions allow automated systems to react when market activity increases beyond normal levels.