True range

A per bar quantity, and the input from which average true range is built. Three candidates are computed: the distance from the bar's high to its low, the distance from its high to the previous close, and the distance from its low to the previous close. The largest of the three is the true range for that bar. The last two candidates are what distinguish it from a plain range, because they reach back to the previous bar and so include any jump between the two.

That anchor is the whole purpose of the construction. Without it every bar is measured as though the chart began at its own open, so a market that gapped and then traded quietly would register a small range on the bar that contained the largest move of the session. With it, the jump falls inside at least one of the three candidates instead of falling between them.

Two properties follow directly. Where a bar opens inside the previous bar's range, the first candidate wins and the measure equals the ordinary range. And the quantity carries units and no direction: it says how far the bar travelled and nothing about which way, which is what makes it usable as a yardstick for stating a distance as a multiple of recent movement rather than as a fixed number of points.