Volatility and Channels

6 algorithms in Technical Indicators · 6 with asserted arithmetic.

In this family#

1. True Range verified

   The greater of today's range, the gap up from yesterday's close, and the gap down from it. Using the plain high−low range instead understates volatility on every gap.

   trueRange(high, low, close)
2. Average True Range (ATR) verified

   Wilder-smoothed true range. Most often used for position sizing and stop placement rather than as a signal — it says how far price typically moves, not which way.

   averageTrueRange(high, low, close, p)
3. Bollinger Bands verified

   A moving average with bands a number of standard deviations away, so the channel widens and narrows with realised volatility.

   bollingerBands(close, p, multiplier)
4. Keltner Channels verified

   An EMA with bands placed a number of ATRs away. Because it scales with true range rather than standard deviation, it reacts differently to gaps than Bollinger Bands — which is the basis of the squeeze comparison between the two.

   keltnerChannels(high, low, close, emaPeriod, atrPeriod, multiplier)
5. Donchian Channels verified

   The highest high and lowest low of the lookback. The oldest channel in use, and the only one here with no smoothing at all — the bands step rather than glide.

   donchianChannels(high, low, p)
6. Bollinger BandWidth verified

   The width of a Bollinger channel relative to its middle band. Low readings mark contraction, which historically precedes expansion — the quantity behind every 'squeeze' screen.

   bollingerBandwidth(close, p, multiplier)

What they share#

Every topic here is a series-transform, so once you have called one the rest follow the same shape. Import paths differ only in the final segment:

import { trueRange } from "fintech-algorithms/technical-indicators/volatility-and-channels/true-range";
import { averageTrueRange } from "fintech-algorithms/technical-indicators/volatility-and-channels/atr";

Read them in the order above — the sequence is pedagogical, not alphabetical.

Where this sits#

Technical Indicators collects 37 algorithms across 5 families. For the concept behind this family rather than the call signatures, see the concept guides.