Using Average Daily Range Bands as Intraday Reference Levels

Summary

This indicator displays nested daily-range zones derived from average high-to-low movement over several lookback windows, including a 20-day measure. It draws rectangles around the current day’s range and marks levels offset from the current daily high and low by the calculated average. The author presents these levels as possible support or resistance areas and as objectives for gauging how far price may travel during a session. The display also labels the current day’s high, low, and open.

The script is a charting aid rather than a complete trading strategy: it gives no entry, exit, or risk rules and reports no performance evidence. Its range averages use historical daily data, so they describe typical movement rather than guarantee future boundaries. The code’s calculations divide the sums for the shorter lookbacks by values that do not match the number of observations accumulated, which may affect the resulting levels. Users should understand and check the calculations before relying on the plotted bands.

Key ideas

• The indicator plots daily price zones based on average high-to-low ranges from multiple lookback periods.
• The levels can be used as possible support, resistance, or session objectives.
• It labels the current daily high, low, and open alongside the range bands.
• The tool describes historical average movement and does not guarantee future price limits.
• The shorter-window averaging divisors in the supplied script appear inconsistent with the observations summed.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.