Hello Eveyone:
Newbie here with a question… so I ran an ADR for gbp/usd and it says the Average Daily Range is 1660
Can someone please interpret this please. Im confused. Thanks
“The indicator computes yesterday’s Day Range (Daily High - Daily Low), the previous 5, 10 and 20 days ranges. And it calculates the “Average Day Range” of these four ranges (yesterday’s+ Prev 5 Day Range + Prev 10 Day Range + Prev 20 Day Range)/4.
So, if yesterday’s Day Range was 80, the Previous 5 Day Range was 110, the Previous 10 Day Range was 90 and the Previous 20 Day Range was 120, then the Average Day Range would be 100.”
from pipeline on forex-tsd
so does if the gbp/usd ask was 1.51687…is it saying the average adr was around 1.51660?
It just tells you what the diff between the high and low for each session has been. Its good for determining whether volatility is high or low, or increasing or decreasing… which tells you how much you may realistically be able to make on your trades. Bigger range = bigger reward potential
It also means bigger loss potential. When volatility is higher you need wider stops to avoid getting whipped out.
Thats correct. But if you can increase your risk by a smaller multiplier than your reward it makes the increased volatility very attractive
Does anyone have a link for a site that calculates the ADRs for all the major pairs? I’m sure these numbers change over time and that there must be a site somewhere that tracks and posts ADRs for all the majors.