Range Rider: Using True-Range Compression to Anticipate Expansion

Summary

Range Rider compares a fast moving average of true range with a slower one, expressing the ratio as a percentage. The indicator is attributed to Larry Williams. Its purpose is to highlight periods when the price range is contracting; such compression may precede an expansion in daily ranges, making it a possible tool for monitoring volatility conditions.

The document gives the indicator’s calculation concept and explains its intended interpretation, but it offers no chart details, performance results, parameter values, or rules for entering and exiting trades. The suggested relationship between contraction and later expansion is a premise, not evidence established here. The note also mentions a required software library for the original implementation, which is a platform dependency rather than part of the trading rationale. Traders would need to evaluate the signal on their own instruments and timeframes before relying on it.

Key ideas

• Range Rider compares fast and slow moving averages of true range.
• A falling relative range can indicate price-range contraction.
• The indicator is intended to flag conditions that may precede wider daily ranges.
• The document does not provide a tested trading strategy or performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.