Definition: In trading and financial markets, range refers to the difference between the highest and lowest prices of a financial instrument, such as a currency pair, stock, or commodity, over a specific period. The range indicates the price volatility and the breadth of price movement within that timeframe.
Understanding and analyzing the range is crucial for effective trading. It helps traders identify periods of high and low volatility, determine potential support and resistance levels, and develop trading strategies based on price movement patterns. By monitoring the range, traders can make informed decisions about entry and exit points, manage risk, and optimize their trading performance. Analyzing the range also aids in recognizing market trends and potential breakout or reversal opportunities.
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