Forex trading strategy #23 (Trading with Average Daily Range)

Hi Geert,

I would not include the Sunday candle into may calculations at all, since we have only few hours of trading on Sunday, while we're talking about Average Daily Range, e.g. how much a currency pair can move on a normal 24 hour day.

Alternatively, if you feel the Sunday should be there, you can visually merge Friday's and Sunday's candles, as if they were one, and take Highs and Lows based on that data.

Best regards,
Edward

I see there is a small error in my cirkeldrawingskills there.. It should be the candle on the right side from the cirkels.

Geert.

Hi,

I've been trading this system now for a little while and I'm having a problem with calculating the ADR. When the market opens on Sundaynight, there will be a small candle referring to only a few hours. I'm not sure if that has anything to do with the fact that I'm a Dutchman and trade within a different timeframe. In the added file I circeled the smallcandles that arise on that short period.

Can anyone tell me how to calculate it properly?

Regards,

Geert

H/L should be taken for the Daily candles.
5 pm EST is the time when one of the largest markets - US market - closes. Many traders use 5 pm EST as their day closing reference time.

Regards,
Edward

High/Lows from which candle? 1h daily?
Time is 5pm EST? Why?

Strategies like this one which use average daily range will always be effective.
good luck!

Thomas

Hi,

Is this strategy still working? I just came across it today and love the simplicity of it.

I tried the system last night on my demo and made 32 pips on eur/usd

Here is the Average [Daily] Range indicator for MT4 that allows you to enter a fast and slow period. You need to put all three files in the correct locations and compile both mq4 files in that order:

HelperFunctions.mqh must be put in the include folder
HelperFunctions.mq4 must be put in the libraries folder and compiled
Average Range.mq4 must be put in the indicators folder and compiled

It calculates the average range (AR) in pips using the past N trading days. AR is the same as ADR (Average Daily Range) when the timeframe is set to PERIOD_D1. The function iAR() is written for code reusability so it can also be used for other symbols and timeframes as well.

You may also want to set the OptimizePerformance option to true. This limits the number of bars used for calculation to 400 by default (you can change this number to suit). Otherwise it would take a very long time to calculate the AR for all bars downloaded from the History Center.

My test results are consistent with the findings on this site: Volatile currencies table

In return please share your experience in using Average Range in your trading strategy.

Scott

Hi guys, any feedback on this strategy lately?

At a glance, your calculation is actually a 14-day ADR.

That should be the same as using ATR (Average True Range) on any plaform and setting it to "14". It's a similar gauge used by the Turtles for much longer term trades (they used it for their "N" value back then).

And yes, MetaTrader has ATR. Look under "Indicators" in the Navigator window and look for Average True Range. Drag and drop it onto your chart. The current number is displayed at the top left of the ATR indicator's window.

i hav software ADR3 it calculates for 10days what do u feel,timi

which currency do you trade ? On Daily (D1) timeframe ?
thanks

ADR is not available with any trading platform. we have to calculate manually. :(

and I am using this strategy since 6month and i got positive result.

Ipun.

I think 5am EST is better for myself

Alex Liu