Define targets for a "slaughter" trade with the ADR indicator
How often did greed force you to sit in a deal longer than necessary? How many times have you scolded yourself for leaving the market too early? Enough!
Enough. It's time to stop wandering in the dark and gain a clear vision of goals in intraday trading. One of the secrets of short-term trading is knowing when to exit a trade. At the same time, taking the maximum number of points, but without excessive incubation in the transaction in the hope of ghostly profit. And a professional forex indicator will help us with this to determine goals within the day - ADR (Average Daily Range).
ADR Indicator Features
Platform: Metatrader 4
Currency pairs: any
Timeframe: M5 to H4
Trading Time: European and American Sessions
Recommended DC: Alpari, Forex4You
The Average Daily Range indicator is set according to the usual instructions for working with indicators, you do not need to invent anything.
ADR indicator features
ADR indicator is a calculator for calculating the average daily range (SDD), is a professional tool for trading on Forex.
The average daily range is an indicator of the maximum daily market movement that can be expected within reasonable limits. The SDD calculator provides valuable real-time market information that is visible even to the eye. The SDD calculator will greatly help you in trading, namely in setting goals.
Advantages of the Professional ADR Indicator
• Automatic calculation of daily and weekly trading ranges
• Provides the ability to chart intraday trading benchmarks - intraday highs and lows.
• After determining the weekly range, you can use the built-in strategies to repel or breakdown of large price levels.
• It is customizable and convenient.
• Defines areas of support and resistance.
• Identifies and verifies the correct direction in the trade.
Professional SDD Calculator Options
• Display settings: standard (full-size) or mini-display.
• Adjustable colors.
• Settings for choosing the average daily range for different traders.
• Ability to select the display location in the corner: in the upper left, upper right, lower left or lower right.
• Adjustable font size
• Settings for daily and / or weekly levels.
ADR indicator operation
The Average Daily Range (ADR) indicator indicates - The Average Daily Range. The name speaks for itself. The indicator calculates the daily range for intraday trading. Useful for both beginners and experienced traders.
I propose to make out what it is. This can be done more clearly on the chart of a currency pair. For example, on the hourly chart of the euro / dollar. The daily range is nothing more than the distance, in points, from the lowest point to the highest point on the chart, the price passed for a particular trading day. Please do not confuse this with the distance from opening to closing of the day.
The range of the day 27.03 will be equal to 67 points.
If you switch to the daily chart, the range will be the distance from high to low of the daily candle. The average daily range is the arithmetic average of a number of days. For example, if we want to know the average range for the past week, then we need to take the value of each day. These are 114 points for Monday, 96 points for Tuesday, 53 for Wednesday, 67 for Thursday and 68 for Friday. Add them up, then divide by the total number of days. That is, at 5.
As a result, the average daily range will be equal to 80 points.
Any other period is calculated in the same way. Let's see what the indicator looks like. It is installed in the same way as any other indicator. If you encounter any difficulties, you can familiarize yourself with the instructions located on our website using the search. We throw the indicator on the chart.
A window with options opens.
And click OK. We see several levels and in the lower left corner a table with information. We will call this an auxiliary window.
The main value are two levels that are the boundaries of ADR.
This range shows approximately in what interval the price will move. Shows what potential a currency pair has. The remaining levels are weekly auxiliary levels. They are also calculated based on ADR.
Let's look at how ADR is taken in a week. That is, in 5 days. And ADR for a month, for 20 days. They are folded and divided in half. If we add the closing price of the last Friday to the result, we get the week high level. And if we subtract the closing price of the last Friday from the result, we get the week low level. If the sum of the weekly and monthly ADR is divided by 4 and the closing price of last Friday is added, then we get the level week mid high. And if you take the Friday closing price off, we get the week mid low level. The remaining levels are completed at the same interval as between the week high and week mid high levels.
In the auxiliary window you can find useful information for yourself. This is the average daily range for the number of days that is specified in the settings. The default is 5 days. For the previous day. During the week. Per month. And for six months. The high and low value of the current day and the distance in points from the current price to high to low are also displayed. It also shows the value of high and low ADR. And the distance in points from the current price to the upper and lower limits of the range.
Let's consider how to use all this in practice. At night, when the American and European markets are closed, the market is rather sluggish - the current one. And the main trade begins at the opening of Europe, which we can use and try to enter the market for a breakdown of lateral night traffic. On the M-30 this trade corridor will be better visible. We draw resistance support levels. The resistance level coincides with almost a weekly level of week mid low. After the breakdown of the support level, we enter the market, and our goal will be the lower border of ADR. For better reliability, you can make take profit a couple of points smaller, because this is still the middle range. This is not an exact figure. It can be either larger or smaller. But, for reliability it will be necessary, nevertheless, to take a little less. As you can see, the price falls further. And it comes to 1.3702. If you set take profit at this level, the price would not have reached literally 1-2 points.
But, after such tails and a pinbar, I would have closed the deal anyway. The price hit the lower limit of the range and the weekly support level, also a pinbar. And, one could expect a pullback and try a rather risky entry to the breakdown of this level.
Take profit at the upper border of the ADR is a small margin, and then you could count on about 40-45 points. A less risky entry would be to breakdown this level of resistance.
Then we could count on approximately 20 points.
Consider a couple of inputs using the example of a pair: American dollar / Canadian dollar. Here, the 5-day range is 78 points. Let's move on to the M-30. Since we all rest at night, rather than trade, in the morning, I would go for a breakdown of this level.
Take profit at the upper border of ADR with a small margin, and you could take about 50 points. Which is very good for intraday trading. Also, you could try to break down here at this level of support, but that would not be so successful. And, I still would not enter, since here the price was already quite close to the lower border of the ADR.
In general, it is extremely important not to buy at the top and not to sell at the lower end of the range. It is also important to monitor the release of news, before making any decisions and make adjustments for the main trend. There are still times when the daily range of the previous 1-2 days is significantly behind the average range. Then it is quite possible to expect from the market that it will catch up with the normal value of ADR.
The average daily range can be used with any intraday trading strategy, as an auxiliary, or the main tool for finding a profit-taking point.
Description of ADR indicator settings
Day_x - indicate how many days will be taken into account the average daily range
Corner - indicate the location of the auxiliary window (0-left upper corner, 1-right upper, 2-left lower, 2-right lower)
ADR_color - text color in the auxiliary window
Daily_Hight_Color - Haya ADR tag color
Daily_Low_Color - color label Low ADR
Display Settings (Enter "Yes" or "No" with your hands)
Show_Daily_Hight_Low_Lines - show high and low average daily range
Show_Weekly_Lines - show auxiliary weekly levels
Show_Mini_ADR - minimization of the auxiliary window
Font_size - set the font size (from 6 to 14)
Vertical_Spacing_Adjustment - the line spacing is set