The ADR target bands

ADR target bands | Big candles | Coloured moving average | Daily market heatmap | Day comparer | Day delineation | Displaced chart | Displaced moving average | Hikkake pattern | Hourly volatility histogram (HVH) | Inside bars or candles | Inventory retracement bar (IRB) | One day reversal pattern | Point in time | WL bars |

The ADR Target Bands are price target ranges based on the average daily range (ADR) of a market calculated over two different periods. You can determine the two periods in the platform yourself or you can work with the default settings of 7 and 14.

The upper target band is calculated by adding the average daily ranges for the two periods to the current day´s low. The lower target band is calculated by subtracting the average daily ranges from the current day´s high.

The advantages of the ADR Target Bands:

  • They can be used on all instruments.
  • They can be used in all time frames.
  • They are easy to understand.
  • They offer targets for the market price and thus can be used as stops and targets.
  • They can be used as trading signals to open a position.

This example shows the ADR Target Bands on the DAX future in a 10-minute chart. The down move stopped when the lower target band based was reached.

ADR Target Bands

In addition to using the ADR Target Bands as targets, some traders open a long position when the market price reaches the lower band and a short sell position when the market price reaches upper band.

This example shows three potential trading signals; two buy signals and one short sell signal.

Trading signals ADR target bands