Average Daily Range Calculator
Quickly compute average daily range with accurate formulas. See amortization schedules, growth projections, and side-by-side comparisons.
Formula
ADR = Sum of (Daily High - Daily Low) / Number of Days
The Average Daily Range is calculated by finding the difference between the high and low price for each day over the lookback period, then dividing the sum of all daily ranges by the number of days. The result is typically expressed in pips for forex pairs.
Worked Examples
Example 1: EUR/USD 5-Day ADR Calculation
Problem: Calculate the ADR for EUR/USD with the following 5-day data: Day 1 (H: 1.1050, L: 1.0980), Day 2 (H: 1.1075, L: 1.0995), Day 3 (H: 1.1040, L: 1.0960), Day 4 (H: 1.1090, L: 1.1010), Day 5 (H: 1.1065, L: 1.0970). Pip value: $10, lot size: 1.
Solution: Day 1 Range: 1.1050 - 1.0980 = 0.0070 = 70 pips\nDay 2 Range: 1.1075 - 1.0995 = 0.0080 = 80 pips\nDay 3 Range: 1.1040 - 1.0960 = 0.0080 = 80 pips\nDay 4 Range: 1.1090 - 1.1010 = 0.0080 = 80 pips\nDay 5 Range: 1.1065 - 1.0970 = 0.0095 = 95 pips\nADR = (70 + 80 + 80 + 80 + 95) / 5 = 81 pips\nDollar Value = 81 x $10 x 1 = $810
Result: ADR: 81 pips | Dollar Value: $810 | Suggested SL: 20 pips | Suggested TP: 41 pips
Example 2: GBP/JPY Higher Volatility ADR
Problem: Calculate ADR for GBP/JPY over 5 days: Day 1 (H: 188.50, L: 187.30), Day 2 (H: 189.10, L: 187.80), Day 3 (H: 188.90, L: 187.50), Day 4 (H: 189.60, L: 188.00), Day 5 (H: 189.30, L: 187.70). Pip value: $6.70, lot size: 1.
Solution: Day 1 Range: 188.50 - 187.30 = 1.20 = 120 pips\nDay 2 Range: 189.10 - 187.80 = 1.30 = 130 pips\nDay 3 Range: 188.90 - 187.50 = 1.40 = 140 pips\nDay 4 Range: 189.60 - 188.00 = 1.60 = 160 pips\nDay 5 Range: 189.30 - 187.70 = 1.60 = 160 pips\nADR = (120 + 130 + 140 + 160 + 160) / 5 = 142 pips\nDollar Value = 142 x $6.70 x 1 = $951
Result: ADR: 142 pips | Dollar Value: $951 | Suggested SL: 36 pips | Suggested TP: 71 pips
Frequently Asked Questions
What is the Average Daily Range in forex trading?
The Average Daily Range (ADR) is a technical indicator that measures the average difference between the high and low price of a currency pair over a specified number of trading days, typically 5, 10, 14, or 20 days. It represents the typical amount of price movement a pair experiences in a single trading session, expressed in pips. The ADR is a volatility measure that helps traders understand the normal price fluctuation range for a given instrument. A higher ADR indicates greater volatility and wider price swings, while a lower ADR suggests quieter, more range-bound price action. Traders use ADR to set realistic profit targets, determine appropriate stop-loss levels, and assess whether a pair has enough movement potential to be worth trading.
How do you calculate the Average Daily Range?
The Average Daily Range is calculated by finding the difference between the high and low price for each day in the lookback period, then averaging those daily ranges. The formula is ADR = Sum of (Daily High - Daily Low) divided by the Number of Days. For example, if over 5 days the ranges were 70, 85, 60, 90, and 75 pips, the ADR would be (70 + 85 + 60 + 90 + 75) / 5 = 76 pips. Most traders use a 5-day or 14-day lookback period. A shorter period is more responsive to recent volatility changes while a longer period provides a smoother, more stable reading. Some traders also calculate a weighted ADR that gives more importance to recent days, similar to how an exponential moving average works compared to a simple moving average.
How does ADR differ from Average True Range (ATR)?
While both ADR and ATR measure volatility, they differ in their calculation methodology. ADR simply measures the difference between the high and low within each trading day, then averages those values. ATR, developed by J. Welles Wilder, uses the True Range concept, which takes the greatest of three values: the current high minus low, the absolute value of current high minus previous close, and the absolute value of current low minus previous close. This means ATR accounts for gap openings between trading sessions, while ADR does not. In forex markets, where trading is nearly continuous on weekdays, gaps are relatively rare except over weekends, so ADR and ATR tend to produce similar values. In stock markets, where daily gaps are common, ATR is generally considered the more accurate volatility measure.
How does news and economic events affect the Average Daily Range?
Major economic releases and news events can dramatically increase daily ranges well beyond the average. High-impact events like Non-Farm Payrolls, central bank interest rate decisions, inflation reports, and GDP releases routinely produce daily ranges that are 150 to 300 percent of the normal ADR. During such events, the standard ADR-based stop loss and take profit levels may be insufficient, and traders should either widen their levels or avoid trading entirely around these events. After the initial volatility spike, pairs often settle back toward their normal ADR within one to two sessions. Experienced traders track an economic calendar and compare actual ADR on event days versus non-event days to calibrate their volatility expectations more precisely.
What are the limitations of using Average Daily Range?
The ADR has several important limitations traders should understand. It is a backward-looking indicator based on historical data and does not predict future volatility. Extraordinary events can produce daily ranges far exceeding the ADR with no warning. The ADR treats all trading days equally, but volatility varies significantly by day of week, with Mondays and Fridays often showing different patterns than mid-week sessions. It does not account for the direction of price movement, only the magnitude, so a high ADR does not indicate whether prices will rise or fall. The ADR also does not distinguish between trending and ranging markets, where the same average range can have very different trading implications. Finally, ADR calculations using only a few days of data can be significantly skewed by a single outlier session, which is why using at least 5 to 14 days of data is recommended.
Is my data stored or sent to a server?
No. All calculations run entirely in your browser using JavaScript. No data you enter is ever transmitted to any server or stored anywhere. Your inputs remain completely private.