5ADR - Average Range of Last 5 CandlesticksAverage Daily Range (ADR) Indicator for the Last 5 Days
This script calculates the Average Daily Range (ADR) for the last 5 trading days. It helps traders to understand the average movement in pips, providing insights into potential price movements.
How to Use:
Set Chart to Daily Timeframe : Ensure your chart is set to the daily timeframe.
Hover Over Previous Day : To see the ADR for today, hover your mouse over the previous trading day.
For example, if today is Tuesday, hover over Monday to see the ADR for Tuesday.
Read ADR in Blue : The ADR will be displayed on the left side of the chart in blue color.
Average True Range (ATR)
Average True Range... and BollingersATR is a great indicator designed to show you the previous ranges of the previous candles depending on the value chosen, in this example I have done 6 periods, so you can see in this chart I have highlighted when we have peaks and troughs and one thing to do is compare the times of day this activity happens, you can see at certain times the atr climbs, it stalls at others or can fall, so ATR is showing us previous candles range, so if you are in a trade you want the range to be growing usually so that your trade can head to TP, but the important thing to takeaway is the fact that price is moving alot, this is because it is experiencing higher level of trading activity price is trending, where as a falling ATR reading means typically things are slowing down or accumulating, remember this doensnt give direction though as price can still move up or down despite a falling range per candle. However what it can do is tell you good times to look for trades, you can filter down by time the best time to take trades based on your strategy winning or losing in the peaks of troughs. ATR can also be used to determine stop losses of TP, by taking the the reading and using a 2xreading stop loss or TP, the more volatile the market the bigger your stop losses and tp will be, but more volatility generally correlates well with that idea, not only does it offer greater protection it also prevents missing out on good moves. So 2nd part is Bollinger bands we can see how it works, it basically again is telling you the range of things, so Id like you to compare the reading on ATR to the Bollingers, and you can see when ATR falls and the Bollingers are squeezing tight we have very little to trade, energy is low and range is small, In crypto I have heard this term called the crab which I have to say... I do find quite amusing. When ATR is rising the Bollingers expand creating a wide cloud, so on the last box, where price falls despite ATR falling... what is the difference this time? That is right, Bollingers are not squeezed together, which tells us the ATR reading is acting like it is small and stuck in a squeezing formation but in fact we are just in an expansion of the Bollinger moving slowly. What do I want you to take away from this? Just a deeper thought about which market conditions are best for your strategy and how to avoid times which will not really offer a good trade yet ect, and have a look for patterns in how you trade around these volatility indicators! Happy trading... More to come
Fire-eyeing breakout w/ close above 46.45Fireeye Inc is eyeing the February $46.44 high earlier this year for a breakout. This would be a 52 week high as well. Chart on left is the weekly, while the chart on the right is the daily.
I can wait for a daily close above this level or a pull back from this $45.07 close on Friday. The MACD on the daily chart is trying to move higher.
For Fib extensions you can see clustered levels on the weekly chart around $69 and $97. Large long term moves but real targets to take some off, reduce risk. The 97 price would be fighting an all-time high above 97.35 in March 2014.
STOP LOSS: Right now the Average True Range value on the weekly chart is four. I have been doing ATR(10)value multiplied by 2; so in FEYE today it is 4x2=8 then breakout price $46.45 minus 8=$38.45 initial stop loss. I would trail it up if the volatility picks up and the price moves above 50 using the ATRx2 subtracted off the high price (the wick on the candle).
Long winded but a simple ATR trail stop loss method I do in my head now, after 10 months of execution in cash account with options and/or stock shares.
Simply put I will be long on a breakout above $46.45
Options one could get SEPT 50 Calls for $2.60 a contract on Friday 05/22
