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DHR - Daily Half Range Strategy

  • #81
  • Edited 3:58am May 18, 2023 3:00am | Edited 3:58am
EURUSD 15M, Done for the day.
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After a few slow days of movement activity starting to show signs of increasing, big move as European market day starts. Price was returning too and testing the last major low of around 1.08145 which, was also around the previous day low, gave enough room for 5 pip target to be reached.

But wary as ADR(10) around ~70 pips

USD data later today.

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  • #82
  • May 18, 2023 3:07am May 18, 2023 3:07am
Looking at the trades taken, maybe the retest of the 50% ADR(10) with strength might be a safer option to trade; just a thought. As I continue to find ways of reducing the number of trades hitting SL.
  • #83
  • May 18, 2023 4:03am May 18, 2023 4:03am
Quoting Ronin-
I had a thought / question. The DHR Line indicator utilises todays ADR(10) value, but note the OGT ADR indicator uses yesterdays ADR value for today's value, is there a preference and what is the reason to use yesterdays value as we know todays ADR(10) value because it is an average. Todays value will include yesterdays value due to being a mean value.
Really I am at a loss to understand what is today value vs yesterday's value.

This is an example of how I have always seen the ADR to be calculated -

How to calculate the Average Daily Range value

This indicator calculates the ADR value by taking the distance between the high and the low of the past 14-day period, summing them together, and finally dividing the result by 14.

For example, if the daily range of a currency pair for the past 14-day period are 55,76,34,42,66,89,65,45,22,101,78,33,67, and 90, The ADR value will be (55+76+34+42+66+89+65+45+22+101+78+33+67+90)/14 =61.6 pips

The ADR value is thus approximately 62 pips.

I highlighted the section that contains the word "past" as it seems in your post that somehow today's pips are included in the reading.

You would have to explain this in simple terms, I cannot grasp the concept.

Thanks
It takes a lot for me to IGNORE you, but you can try.
  • #84
  • Edited 4:25am May 18, 2023 4:12am | Edited 4:25am
Quoting Erebus
{quote} Really I am at a loss to understand what is today value vs yesterday's value. This is an example of how I have always seen the ADR to be calculated - How to calculate the Average Daily Range value This indicator calculates the ADR value by taking the distance between the high and the low of the past 14-day period, summing them together, and finally dividing the result by 14. For example, if the daily range of a currency pair for the past 14-day period are 55,76,34,42,66,89,65,45,22,101,78,33,67, and 90, The ADR value will be (55+76+34+42+66+89+65+45+22+101+78+33+67+90)/14...
Maths understood, hopefully the picture explains what I mean:

Value today for ADR(10) is 65 pips, but the indicator uses yesterdays value of 71 pips which is the average of the 10 days prior to yesterday, hence the question. In the DHR line indicator todays value is used calculated on the past 10 days prior to today.

I hope that makes sense.

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  • #85
  • May 18, 2023 4:25am May 18, 2023 4:25am
Quoting Ronin-
{quote} Maths understood, hopefully the picture explains what I mean: Value today is 65 pips, but the indicator uses yesterdays value of 71 pips which is the average of the 10 days prior to 1 days, hence the question. In the DHR line indicator todays value is used calculated on the past 10 days prior to today. {image}
Still doesn't make sense to me; of course, using today range will ALWAYS make the calculation smaller, the range isn't complete

Hopefully the picture explains, I'm leaving it there because just can't continue this discussion, sorry

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It takes a lot for me to IGNORE you, but you can try.
  • #86
  • Edited 4:50am May 18, 2023 4:40am | Edited 4:50am
Quoting Erebus
{quote} Still doesn't make sense to me; of course, using today range will ALWAYS make the calculation smaller, the range isn't complete Hopefully the picture explains, I'm leaving it there because just can't continue this discussion, sorry {image}
Got it!! Went old school and used the calculator. Know the maths, was just thinking about it the wrong way, hence asking a question. Thank you Erebus.

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Given that using ADR(10) including todays value gives a smaller value, I think that is what I was trying to elude to.

In your experience would this give a small advantage on entries or not?
  • #87
  • May 18, 2023 6:08am May 18, 2023 6:08am
Quoting Ronin-
{quote} In your experience would this give a small advantage on entries or not?
In my experience, I simply just have not ever seen anyone do the calculation including today's price range, so there is no way for me to give advice.

For me, it's just not done that way, and frankly, I doubt there is anything to gain, it could make it worse in fact.

Say you set the target, then the range increases, so the target moves?

I have reverted to my normal short-term trending day trading for now, good luck.
It takes a lot for me to IGNORE you, but you can try.
  • #88
  • Edited 9:18am May 18, 2023 8:54am | Edited 9:18am
Quoting Erebus
{quote} In my experience, I simply just have not ever seen anyone do the calculation including today's price range, so there is no way for me to give advice. For me, it's just not done that way, and frankly, I doubt there is anything to gain, it could make it worse in fact. Say you set the target, then the range increases, so the target moves? I have reverted to my normal short-term trending day trading for now, good luck.
Hi gold chart
First entry is half range entry
Eusd
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  • #89
  • Edited 2:04pm May 18, 2023 9:56am | Edited 2:04pm
Additional rules for filtering out slow days. Will be added to post 1 in due course.

-Current day not traded if Previous day ADR(1) < 50 pips on EURUSD. The ADR(1) minimum will need to be determined for each market / pair being traded etc.

-DHR Strength Meter coded based on cpfleger observations. A difference between the based currency and pair should be 0.5 and above.
- Needs further coding to be user friendly, such as changing position on chart window etc..
- For the Strength Meter to work, add any prefix or post fix that your broker adds to the chart symbol into the indicator, if required.

-DHR Strength Meter added to post 1.

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  • #90
  • May 18, 2023 10:17am May 18, 2023 10:17am
Quoting Ronin-
Additional rules for filtering out slow days. Will be added to post 1 in due course. -Current day not traded if Previous day ADR(1) < 50 pips. The ADR(1) minimum will need to be determined for each market / pair being traded etc. -DHR Strength Meter coded; based on raw currency pairs data. A difference between the based currency and pair should be 0.5 and above. -DHR Strength Meter added to post 1. {image}
Bundle of thanks Ronin
  • #91
  • May 18, 2023 10:37am May 18, 2023 10:37am
Quoting Ronin-
Trade worked out on EURUSD 15M. That was a bit scary but backtesting has shown the method works 80-90% of the time. The trade today was in essence a breakout of the previous day low. Note grey line at the red sell line. Trade entered at the daily low followed by pullback and then price returned to bear trend and formed lower low. This is why I have mentioned about restricting the trading time to avoid entry at the first test. I think it better to show live trades and then members can decide for themselves about the strategy. Thanks Erebus for the...
Sir don't understand ADR% indicator can you explain?
  • #92
  • Edited 2:10pm May 18, 2023 12:57pm | Edited 2:10pm
Quoting ahsan321
{quote} Sir don't understand ADR% indicator can you explain?
Well if the average ADR was 100 pips, 50% would be 50 pips.

The definition of ADR can be found online.
  • #93
  • May 19, 2023 4:24am May 19, 2023 4:24am
Quoting Ronin-
{quote} Post 61. Buy trade price crosses above blue line, dotted line above blue line is 5 pip target https://www.forexfactory.com/thread/...6#post14426056 Post 73. Sell trade price crosses below red line, dotted line below red line is 5 pip target https://www.forexfactory.com/thread/...0#post14428170
Thanks.

We must open a trade at the close of the current bar which made the signal, do you confirm?
Guppy re-invented All Time Return: 83.3%
  • #94
  • Edited 4:52am May 19, 2023 4:33am | Edited 4:52am
Quoting 8tango
{quote} Thanks. We must open a trade at the close of the current bar which made the signal, do you confirm?
I trade as soon as the closing price crosses the line. There must be sufficient strength and must take into account market structure and what the big picture is telling us.

Not trading today as EURUSD made relatively big move yesterday (~85 pips), so there is potential for price to bounce around today or to recover some pips from yesterday.

As writing the above, the expert advisor opened a buy trade on EURUSD and reached 5 pip target! So I guess recovering pips today.

Trade manually and testing EA in the background. Forgot to turn the EA off. As stated, I was not going to trade today.


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  • #95
  • May 19, 2023 4:55am May 19, 2023 4:55am
Thanks.

Could you post all indicators (and EA) with template necesary for your strategy?
Guppy re-invented All Time Return: 83.3%
  • #96
  • Edited 2:04pm May 19, 2023 4:57am | Edited 2:04pm
Quoting 8tango
Thanks. Could you post all indicators (and EA) with template necesary for your strategy?
Template for method will be added to post 1.

Only 3 indicators:
-Auto refresh
-DHR line v6
-DHR Strength

The EA is still being developed and tested so not for public consumption at current time.

I prefer to trade manually to learn how a particular market behaves. The EA is used for back testing purposes, to understand how the method works, its' statistics (viability), some live testing as back testing is not always reliable and to determine if EA behaves as expected.
  • #97
  • May 19, 2023 5:29am May 19, 2023 5:29am
In theory, is it right seput.
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Guppy re-invented All Time Return: 83.3%
  • #98
  • Edited 7:06am May 19, 2023 5:34am | Edited 7:06am
Quoting 8tango
In theory, is it right seput.{image}
Yes. I trade as the close price (or ask / bid price depending), passes over the line, not the next candle.

Remember this method can not be backtested on the screen as the lines are dynamic and change during the course of the day.
Their final resting place each day could be significantly different from their start position.
Their position is in relation to the high and low of the day, which chnage during the course of the day.

In essence the method is: If the price has moved 50% of the ADR(10) on a particular day it may continue further in the same direction by at least 5 pips. The 50% ADR(10) seems to be an interesting area as the price either continues through, spikes, or decides to reverse. Therefore as stated before, the market picture must be taken into acccount such breakout of previous day high / low, was previous day move large or small relatively etc.....

I find this method prevents over trading, does not use 3 million indicators on the screen, has a defined hypothesis, can potentially be automated, one trade a day (win or lose), has a defined point of entry and target so less stressful etc.... All that is required is to read the market to decide whether to enter trade or not at the line. The small pip target gives the method a higher probability of the 5 pip target.

As with most methods the issue is the larger SL target of 20 pips. However the method seems to reach the 5 pip target signficantly more times than not in my experience so far. This could change in the future.
  • #99
  • May 19, 2023 5:48am May 19, 2023 5:48am
What is the best timeframe for this strategy?
Guppy re-invented All Time Return: 83.3%
  • #100
  • May 19, 2023 5:53am May 19, 2023 5:53am
Quoting 8tango
What is the best timeframe for this strategy?
The D in ADR means "Daily". As stated in last post, 50% of ADR.

Therefore the method is daily, 15M chart utilized to visualize the internal movement of the day.

Needs to be below Daily Chart. 5M - 1H
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