Range indicators will tell you how large the up- and down-swings are for the traded instrument. When prices fluctuate wildly up and down there is high volatility and an range increase. When we prices do not fluctuate much, there is low volatility and a range decrease. Knowing the current market environment prior to opening a position is important, in order to determine the correct position size and stop level.
Our NinjaTrader Relative Ranges is a powerful indicator, allowing you to address volatility changes between the overnight, European and US regular sessions.
In this post we’re discussing the Kaufman Efficiency Ratio and how it relates to determining market momentum, specifically the Balanced Momentum calculation