The Average Daily Range (ADR) is a common metric used to measure volatility in an asset. It calculates the average difference between the highest and lowest price over a time interval – normally five days.
The Inner Circle Trader teaches the importance of this metric from an algorithmic point of view; in particular the 1/3ADR price level is deemed to be a threshold used to determine the area at which a Judas Swing – false move to trick market participants, protraction, manipulation – might exhaust. Another key difference in the ICT-use of this metric compared to the classic approach is that the average range is calculated from New York midnight Time, rather than the daily candle's open.
It is crucial to remember that the elements of Time are key when it comes to interpreting how price action will, or won't, react to this level: what Time of the day is it? what day of the week? what week of the month?
Let's consider the Time of the day. If one thinks about the Power of Three of the daily candle (Accumulation, Manipulation Distribution), it is highly unlikely that a Manipulation event will happen later in the day – whereas seeing the 1/3ADR hold in London session or New York open gives undeniable edge to an Analyst.
Apart from the 1/3ADR level seen from a Judas perspective, the opposing 1/3 level, and the full ADR projections, are excellent algorithmic levels at which we will see orderflow or reactions worth studying. These can be take profit targets, reversal opportunities, pyramid entries, ... Study them, and find what works for you!
Features:
Display a table with the previous N days' ranges and the current ADR value
Decide whether to consider daily candles, or New York (00:00 to 00:00 NY Time) for the basis of the calculation
See the ADR Range, the ADR price levels and 1/3ADR price levels by hovering over the text labels
Plot the ADR levels from the Midnight Anchor, or as offset markers on the side for a cleaner look
Masterpiece. Please share the link to that ICT video if possible.
bootneck73h
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Incredibly useful indicator, your pinescript skills are evident in all that you provide here. Thank you so much
toodegrees
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@bootneck73h, Thank you for the support and kind words!
CoincheffOfficial
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PLease where can i learn how to use it.. is that that when we have a fakeout/judas swing around 1/3ADR thats the judas swing or it happens on any of the ADR?
toodegrees
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@CoincheffOfficial, read the description and start from there. These are ICT teachings, but they are sparse and not in a single video. Usual learning protocol: backtest, journal, tape reading!
SKSingh23
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Hi brother, wondering if you can add option for other time zone users like +5:30 UTC. The assets i trade opens at 9:15 AM and closes at 15:30 PM (in +5:30 UTC) so the daily range; the indicator is not showing proper calculation due to different time zone. Plz add this if u can. I follow and like your indicator very much brother as chart looks very clean but mostly i find this problem with your indicator due to time zone. Plz look into it brother.
Thanks
toodegrees
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@SKSingh23, The tool calculates based on NY Midnight open Time. Even if you change the Timezone, the calculation is the same. What assets are you talking about? Might be able to help.
SKSingh23
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@toodegrees, Thanks for reply brother. Its BANKNIFTY and its index. But its operating time is only from 9:15 AM to 3:30 PM (Time zone +5:30). Plz look into it if u can brother.
Thanks
JHeezy209
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Siiiickk - looking forward to testing
manhhieu2909
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Can you create an additional alert to notify the user when the price crosses the ADR lines?. Thank you for the community support. Wish you good things