Forex trading strategy #23 (Trading with Average Daily Range)
Submitted by User on July 7, 2009 - 09:20.
Submitted by Ipun
1- Close out any open position
2- Cancel any unexecuted orders
3- Set an Entry Buy order 1 pip above previous high
4- Set an Entry Sell order 1 pip below previous low
5- Set stops and limits using the following guidelines:
50 pip profit target, 25 pip stoploss if ADR Above 200
40 pip profit target, 20 pip stoploss if ADR BETWEEN 175 and 199
30 pip profit target, 15 pip stoploss if ADR BELOW 175
Do not trade if ADR is below 100
How to calculate ADR (Average Daily Range)
It may be easiest to use an excel spread sheet for this.
Take the H/L for each day. for the past 14 days.
For each day list the amount of pip's between the H and L
Ex. H=1.5623 L=1.5586
5623-5586 = 137
Add the total amount of pip's for all 14 days and divide it by 14.
This will give you the average daily range.
Forex Average Pips: 250-300/month.