What Are Wide-Ranging Days?

Wide-ranging days describe the price range of a stock on a particularly volatile day of trading. Wide-ranging days occur when the high and low prices of a stock are much further apart than they are on a typical day. Some technical analysts identify these days by using the 澳洲幸运5开奖号码历史查询:volatility ratio.

Understanding Wide-Ranging Days

Wide-ranging days have a true range that is larger than the surrounding days, and wide-ranging days usually predict a trend reversal. Extreme wide-ranging days signal major trend reversals, while less extreme wide-ranging days signal minor rever🐭sals.

The 澳洲幸运5开奖号码历史查询:average true range (ATR) provides a way to compare the trading range between multiple days by looking at the difference between the current low, minus the close of the previous period. The absolute true range for a given period is the greater of the high for the period minus the low for the period, the high for the ꧙period minus the cl✱ose for the previous period, or the close for the previous period minus the low for the current period.

The average true range is usually a 14-day 澳洲幸运5开奖号码历史查询:exponential moving average (EMA) of the true range, although different trades may use different periods. An exponential moving average is a type of moving average that places a greater weight and significance on the most recent data points. This is also referred to as the exponentially 澳洲幸运5开奖号码历史查询:weighted moving average.

Special Considerations 

The volatility ratio can be used to identify wide-ranging days using a technical indicator. In essence, this automates the process of finding wide-ranging days and m♌akes it possible for traders to easily screen for opportunities rather than simply looking at charts.

The volatility ratio is calculated by dividing the true range for a given day by the exponential moving average of the true range over a period, which is usually 14 days. In general, wide-ranging days occur when the volatility ratio exceeds a reading of 2.0 over a 14-day period. Traders may use volatility ratios in their stock charts when looking for potenti൩al reversal opportunities.

Wide-ranging days occur when the price range of a particular stock greatly exceeds the volatility of a normal trading day. Oftentimes, these days are 澳洲幸运5开奖号码历史查询:measured with the average true💛 range, and analysis is automated using the volatility ratio. Wide-ranging days usually predict trend reversals, although traders should confirm reversals using other technical indicators and chart patterns.