Targeting ADR
Average daily range is one of very helpful indicator in forex and can be used in our trading strategies. Take Daily trading range of previous 10 days by doing following calculation.
ADR = High of previous day candlestick - Low of previous day candlestick
Then add all 10 and divide it by 10 to get an average daily range.
If ADR is below 150 then do not trade
How to trade:-
Place buy order 5 pips above previous day high and a sell order 5 pips below previous day low.
If ADR is 150 then set TP = 25 pips and SL = 15 pips.
For every 5 ADR above 150, add 1 to TP and for every 10 ADR above 150 add 1 to SL. So for example if ADR is 200. Then TP would be 25 + (200-150)/5 = 35pips. Similarly SL = 15 + (200-150)/10 = 20.
hmmm.. Do u have any performance history based on this system? Because ADR has very less to do with current volatility. If there is a big news, u may see 400 pip movement no matter what the ADR is.
But still I am interested in looking at any historical performance produced by this system.
Stick to your rules
Thx for sharing.
I will try to use it on demo. Looks interesting.
Originally posted by uniquetraderhmmm.. Do u have any performance history based on this system? Because ADR has very less to do with current volatility. If there is a big news, u may see 400 pip movement no matter what the ADR is. But still I am interested in looking at any historical performance produced by this system.
Yes agree that a news can have big impact but it is very rare. ADR give very good approximate of daily range. I do not have any historical performance but I think system owner has used good logics. Still unless we test it, we cannot say it is profitable.
Originally posted by JogiYes agree that a news can have big impact but it is very rare. ADR give very good approximate of daily range. I do not have any historical performance but I think system owner has used good logics. Still unless we test it, we cannot say it is profitable.
IMO ADR is doing almost nothing in this system except putting SL and TP. For example as u said that if ADR is 150 then TP 25 and SL 15. Now when I say that today's range is not dependent on ADR, it means putting SL and TP based on ADR doesnt make sense. I think this system is derived from other "put 5 pip above and 5 pip below current price" systems. ADR is introduced in order to optimize profit but I think it doesnt have any significant impact.
Stick to your rules
Originally posted by uniquetraderIMO ADR is doing almost nothing in this system except putting SL and TP. For example as u said that if ADR is 150 then TP 25 and SL 15. Now when I say that today's range is not dependent on ADR, it means putting SL and TP based on ADR doesnt make sense. I think this system is derived from other "put 5 pip above and 5 pip below current price" systems. ADR is introduced in order to optimize profit but I think it doesnt have any significant impact.
Well I dun think ADR is a useless indicator. It is true that ADR or ATR is not very popular indicator but doesnt mean that it is not useful. Market never follows any indicator. Indicators are just a tool to predict market movement and market may or may not follow our analysis. Same is the case with this system. Market may move above or below ADR but it doesnt mean that ADR is totally wrong. Usually market moves very close to ADR and there r very few days when it doesnt follow ADR.
I am not saying ADR useless but it cannot make a full fledge system. ATR is better than ADR but even ATR is not very popular indicator.
Stick to your rules
Thx for sharing system.
About ADR-debate--> I agree that it is not very popular indicator but I think ADR is playing important part in this system. For technical traders, trading based on ADR or ATR is logical.
Thx for sharing this system.
It is the first time I have seen a system based on ADR. Looks interesting.
Anyone started testing?
Originally posted by illiterate
Thx for sharing this system.
It is the first time I have seen a system based on ADR. Looks interesting.
Anyone started testing?
I think you have not read all posts...
Who cares about testing when some users are questioning logic of this strategy? :D
Originally posted by Champ
Originally posted by illiterate
Thx for sharing this system.
It is the first time I have seen a system based on ADR. Looks interesting.
Anyone started testing?
I think you have not read all posts...
Who cares about testing when some users are questioning logic of this strategy? :D
Yes I read that debate. But still I think it will be an interesting system especially if someone wants to test ADR's usefullness.