Daily Range PeterE MT4 Indicator (ADR Indicator) provides you with information about the ADR (Average Daily Range), giving you an overview of the current day’s volatility compared to the average of previous days. It can help you decide when to take profit or consider a reversal entry opportunity once the day’s range has reached the ADR level.
Introduction to Daily Range PeterE MT4 Indicator (Average Daily Range – ADR)
This is a simple indicator that provides information about the ADR of previous days as well as the price range of the current day.
The default setting of Daily Range PeterE is based on the average range of the last 10 days. You can easily adjust this parameter in the indicator’s settings.
Another important piece of information this indicator provides is the actual movement range of the current day.
In the example below, we can see: for the CADCHF pair, over the past 10 days the price moved an average of 44.7 pips per day (10-day average range = 44.7 pips), while on the current day the price has moved 12.2 pips.
You can, of course, calculate it manually by measuring and averaging the price range over any number of days, but Daily Range PeterE allows you to do this automatically and effortlessly.
The Meaning of ADR in Trading
First, this indicator provides information about the current day’s price range. If you see that this range is much lower than the ADR, it indicates that the market is quiet and less volatile, possibly moving within a range with no clear trend → you should be cautious and avoid trading at this time.
ADR is Very Important in Forex Trading
Indeed, after testing many markets, I found that the forex market (currency pairs) “respects” the Average Daily Range (ADR) more than any other.
Trading with ADR: ADR is particularly valuable for short-term traders.
When a currency pair’s daily range reaches the ADR level, the price tends to reverse if the current intraday trend is not too strong (i.e., the market is not being driven by major economic news). This is when traders often look for reversal setups.
Using ADR to Take Profit
As mentioned above, when the daily price range reaches ADR, the market often tends to reverse. Therefore, if you are already in a profitable trade and the price is approaching the ADR level, you can consider taking profit once ADR is reached. This is also a very popular profit-taking method among short-term traders.
Using ADR as Support/Resistance
When the price reaches the ADR level, you can draw two horizontal lines marking these levels, referred to as ADR-High and ADR-Low. These two lines act as support and resistance levels for the current trading day.
In practice, to make it easier, you don’t need to draw these lines manually—there are indicators available that will do it for you (see the ADR Maker Indicator for reference).
Installation Guide
Some Important Settings
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Numofday: The number of days used to calculate the average range. You can choose 10 days, but some traders prefer 14 days. Neither option is more accurate than the other—you can experiment and select the number that suits you best.
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Window: The display window of the indicator.
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0: Appears in the main window together with the price chart. -
1: Appears in sub-window 1 below the price chart, and so on.
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Corner: The corner where the indicator will appear:
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0: Top left -
1: Top right -
2: Bottom left -
3: Bottom right
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HorizPos: Adjusts the horizontal display position.
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VerPos: Adjusts the vertical display position.
Conclusion
ADR is an important piece of information in trading, especially for intraday traders, short-term traders, and scalpers. This is an indicator that should be installed by traders, particularly if you trade forex currency pairs.
