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7 Charting Tools for Spread Betting: A practical guide to making money from spread betting with technical analysis by Malcolm Pryor

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Further Notes on ATR, ADX and Moving Averages

ATR

A measure is taken each period of the distance travelled by price during that period. This is called the True Range. Then an average is taken of the True Range over a user-defined number of periods.

For the majority of periods the distance travelled by price during the period is calculated simply as the difference between the highest price and the lowest price in the period.

Gaps

But there is an extra tweak to the calculation which is used when there has been a gap. I define a gap here as when the highest price of a period is lower than the close of the previous period. Or when the lowest price of a period is higher than the close of the previous period. When there has been a gap the ...

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