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RichardH

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ADR Levels Indicator
« on: August 26, 2014, 12:26:40 PM »
Hi Anthony,

Just wondering if you might be able to provide any guidance on how you guys use the ADR levels indicator in the ANTS context.

Cheers,

Richard

Anthony

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Re: ADR Levels Indicator
« Reply #1 on: August 26, 2014, 02:00:58 PM »
Hi Richard

We can use the ADR levels as targets for our trades.

Research has shown, that a chart will reach 75% of its ADR, 85% of the time, therefore this would be an ideal target to take profits. It also allows us to asses if the trade we are about to take has enough room, so does the trade have a minimum 2:1 Reward:Risk ratio from entry point to the 75% level?

Hope this answers your question.

Anthony

RichardH

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Re: ADR Levels Indicator
« Reply #2 on: August 27, 2014, 03:50:36 AM »
Thanks Anthony,

Thanks for that.  Are the other lines just plotted for reference purpose to the 75% line or do the other lines have probability associated with them as well?

Also, I'm guessing that the indicator reads yesterday's (as per server time) high and low and plots off that.  Is that correct?  If so, can you tell me how it treats Sunday data (if present) as Sunday figures tend not to be representative of normal trading and so quite often skew the indicator results if included.

Cheers

Anthony

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Re: ADR Levels Indicator
« Reply #3 on: August 27, 2014, 08:39:01 AM »
Hi Richard

Plotting the other ADR levels can be useful in knowing where, in relation to the overall daily range, price is at the moment. It may be that you take a trade where the 75% is closer than a 2:1 reward risk but the 100% is far enough away and therefore you decide that this is an acceptable risk. Or you might see a trade setup but price has already moved beyond 100% of its average daily range and therefore the probability of success is reduced, thats not to say the trade wont work if the setup is correct and the chart is trending, but probability is lower due to the fact that price is so far over the 100% level.

The levels are calculated as an average 'X' days (user definable) with a default of the last 5 days, but the calculation does not take sunday into account so a truer average is produced.

Anthony

RichardH

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Re: ADR Levels Indicator
« Reply #4 on: August 27, 2014, 03:48:48 PM »
Thanks Anthony.  That clears it up for me. 

Cheers,

Richard