Average Day Range (ADR) - Built-in Indicator Guide

Computes the difference between the simple moving averages of high and low prices over a specified period.

Overview

The Average Day Range (ADR) indicator measures the average distance between the high and low prices over a given lookback period. It is used to gauge the typical price range of an asset, helping traders identify periods of expanding or contracting volatility. On the chart, a single blue line is plotted representing the ADR value at each bar.

How it works

1. The user specifies a ‘length’ parameter (default 14) that determines the number of bars used in the moving average calculation.
2. For each bar, the indicator computes a simple moving average (SMA) of the high prices over the last ‘length’ bars using Sma.new(self.high, length).
3. Similarly, it computes an SMA of the low prices over the same period using Sma.new(self.low, length).
4. The ADR value for the current bar is obtained by subtracting the low SMA from the high SMA: sma_high[0] - sma_low[0].
5. The result is plotted as a continuous blue line on the chart.

Mathematical model

Parameters

Code walkthrough

Indicator declaration and parameters

Lines 6-8 of Average Day Range.indie5:

@indicator('ADR')  # Average Day Range
@param.int('length', default=14, min=1)
@plot.line(color=color.BLUE)

The @indicator('ADR') decorator sets the display name. @param.int('length', default=14, min=1) creates a user-configurable integer parameter with a minimum value of 1. @plot.line(color=color.BLUE) defines the output as a blue line on the chart.

Computing moving averages

Lines 10-11 of Average Day Range.indie5:

    sma_high = Sma.new(self.high, length)
    sma_low = Sma.new(self.low, length)

Sma.new(self.high, length) returns a series of simple moving averages of the high prices. The same is done for low prices. These series are accessed with [0] to get the current bar’s value. The Sma.new function handles the rolling calculation internally.

Returning the plot value

Lines 12-12 of Average Day Range.indie5:

    return sma_high[0] - sma_low[0]

The function returns the difference between the two SMA values. This single numeric value is automatically plotted by the @plot.line decorator. If the series have not yet accumulated enough bars, the value may be NaN, resulting in no plot on those initial bars.

Reading the chart

• The ADR line is plotted in blue.
• Higher values indicate that the average range between high and low has expanded over the lookback period, suggesting increased volatility.
• Lower values indicate a narrower average range, suggesting decreased volatility or consolidation.
• The line can be used to identify periods of expanding or contracting volatility relative to recent history.

Implementation notes

• The indicator returns NaN for the first length - 1 bars because the SMA requires that many bars to compute a value.
• This is not the same as the Average True Range (ATR); ADR uses only the high and low of each bar, ignoring gaps and overnight moves.
• The calculation uses a simple moving average, not an exponential or weighted average.

FAQ

What does the ‘length’ parameter control?

It sets the number of bars used in the simple moving average calculation for both the high and low prices. A larger length produces a smoother line that reacts more slowly to recent price changes.

How is ADR different from ATR?

ADR uses only the high and low of each bar, while ATR also considers the previous close and gaps between bars. ADR is a simpler measure of intra-bar range, whereas ATR captures total volatility including overnight moves.

Can I change the color of the ADR line?

Yes, modify the color parameter in the @plot.line decorator. For example, @plot.line(color=color.RED) will plot the line in red.

Full source code

Indie Script v5, the built-in indicator as shipped with TakeProfit. Add it from the indicators menu or copy the code into the platform’s script editor.

# indie:lang_version = 5
from indie import indicator, param, plot, color
from indie.algorithms import Sma


@indicator('ADR')  # Average Day Range
@param.int('length', default=14, min=1)
@plot.line(color=color.BLUE)
def Main(self, length):
    sma_high = Sma.new(self.high, length)
    sma_low = Sma.new(self.low, length)
    return sma_high[0] - sma_low[0]