Overview

The ADR Targets (Daily) indicator  is a precision tool designed for day traders to forecast accurate price targets using the Average Daily Range (ADR). By plotting key levels based on market volatility, this indicator helps traders identify actionable price zones for scaling profits, setting stop-loss levels, and planning effective intraday strategies. The targets dynamically adjust to the market’s current volatility, providing traders with a consistent framework for analyzing price behavior.

How it works

The ADR Targets (Daily) indicator calculates:

1. Scaling Target (50% ADR) : A conservative target with high probability (>90% accuracy).
2. Primary Target (75% ADR) : A slightly more ambitious target with strong probability (>80% accuracy).
3. Secondary Target (100% ADR) : Represents the full Average Daily Range with moderate probability (>50% accuracy).
4. Extended Target (125% ADR) : An aggressive target for volatile market conditions (<50% accuracy).

The targets are derived from the ADR, which is calculated as the average f the (H-L) range over the past 10 periods. These levels provide traders with clear benchmarks for price movement, helping to optimize entry, exit, and risk management strategies.

The targets are realtime calculated from current day’s low and high and projected above and below current price. 

Example

ADI prices reach the 100% ADR target in the first hour of the day

Settings

• PERIODS: Define the number of sessions for calculating the daily range. Default is 10 but can be expanded to analyze broader price ranges.
• TARGETS: Plots the target levels on the chart, as defined above
• HL: Plots the current high and low of the day
• ADR: Calculate and shows on chart the ADR value calculated on the PERIODS defined (i.e. the Average Daily Range on X Periods)

Benefits for traders

• Set realistic targets: Use precise levels to manage trades and set profit-taking levels
• Enhance risk management: Plan stop-loss levels based on key ADR targets to minimize risk
• Improve decision-making: Trade with confidence using probability-based target levels
• Adapt to market volatility: React to changing market conditions with self-adjusting targets

Who can use it?

• Day traders: Plan precise intraday trades with actionable price targets
• Scalpers: Identify short-term profit zones and manage risk effectively
• Market Analysts: Gain insights into intraday price behavior and volatility
• Beginner Traders: Simplify trading decisions with clear, probability-based levels.

Reference

The methodology behind the ADR Targets (Daily) Indicator is inspired by established principles of volatility-based analysis, including insights from Frank Ochoa’s teachings. This indicator has been independently developed and optimized for ProRealTime to provide traders with an efficient and reliablke tool for intraday target forecasting.