• Overview
  • Reviews
  • Comments (8)
  • What's new

Average Daily Range

As we know, the price moves a certain way called average daily range (ADR) within a trading day. When the price reaches the upper or lower ADR boundary, the probability of further movement in the same direction drops significantly, while the reversal probability is greatly increased. Therefore, ADR boundaries may be used as support/resistance levels.

A new trading day's Open price may also serve as a support/resistance level. Combining these levels with "round" ones and considering price volatility inside the sessions allow you to trade intraday comfortably.

The product creates ADR-based levels and a new day's Open level. All levels are stored in the indicator buffers, thus, they can be used in a trading robot.

The following levels are created:

  • Trading day Open price level - yellow dotted line;
  • ADR upper boundary level - pink dotted line;
  • ADR lower boundary level - light-green dotted line;
  • ADR upper boundary floating level (price upward movement's action radius) - pink solid line;
  • ADR lower boundary floating level (price downward movement's action radius) - light-green solid line.

Fig. 1 displays EURUSD symbol chart. Some remarkable price and level "meeting" points are marked by yellow ovals. Fig. 2 shows similar example for Russian FORTS market. Simply watch the indicator work on history and in real time mode.


Parameters

  • History Show Period - limit the history period displayed on screen as a chart. Specified number of displayed days does not depend on the chart's timeframe.
  • Use EMA for Daily Average - use EMA average when calculating the average daily range. If set to No, the simple averaging will be used.
  • Days Start Minutes - beginning of the interval within the day to calculate the average daily range.
  • Days End Minutes - end of the interval within the day to calculate the average daily range.
  • Show Open Day Round Levels - enable/disable the display of the "round" levels relative to the day's Open price.
  • Open Day Round Levels Step - step in price points for the "round" levels relative to the day's Open price.

If you have any interesting ideas for improving this or any other product I offer, then you'll get a big discount for any of my products (or even get it for free) if the idea is realized.

Please write all your suggestions on the Comments tab, so we can have a documentary proof of the ideas and see who the first author is.

No reviews
Version 1.3 - 2016.08.05
1. Automatic optimization for the number of days for calculating the average daily range. It can be launched either at the start of the indicator (after it is attached to the chart), or when switching timeframe of the chart with running indicator.
2. "Round" levels relative to the daily opening price. Step of the levels is set by the parameter:
'Open Day Round Levels Step' in points.
3. Parameters that set the start/end of the interval within a day, that will be used in calculation of the average daily range. Set as the number of minutes from 0 to 1440:
'Day Start Minutes' - beginning of the interval;
'Day End Minutes' - end of the interval;
4. Fixed minor bugs.