Average Daily Range Fibonacci Levels

The Average Daily Range Fibonacci Levels indicator is a technical analysis tool that projects support and resistance zones based on the historical average daily price volatility combined with Fibonacci ratios. By centering these calculated ranges on the current day's open, the script identifies potential reversal or breakout areas where price action frequently reacts.

Usage

The script is designed for intraday traders looking to identify exhaustion points or trend targets. The primary levels are centered on the daily open price, projecting both upward and downward zones.

• Support and Resistance: The Fibonacci levels act as dynamic barriers. Typically, the 1.0 ADR level (often marked by thicker lines) represents a standard completion of the expected daily move.
• Trend Exhaustion: Prices reaching the outer Fibonacci extensions (e.g., 1.618 or higher) often indicate overextended market conditions, suggesting a potential mean reversion.
• Dynamic Zones: When enabled, the "Dynamically Show Zones Outside ADR" setting allows the indicator to reveal higher extension levels only when the price actively breaks beyond the standard ADR range, keeping the chart clean during low-volatility periods.

Details

The indicator calculates the Average Daily Range (ADR) by taking the difference between the daily high and low over a user-defined lookback period. This base value is then multiplied by standard Fibonacci ratios (0.236, 0.382, 0.5, 0.618, etc.) and applied to the current day's opening price.

Unlike fixed pivot points, these levels are relative to the asset's recent realized volatility. The script also offers alternative calculation methods:

• Basic: Uses a Simple Moving Average (SMA) of the daily range.
• Standard Deviation: Uses the statistical dispersion of the daily range.
• Variance: Uses the variance of the daily range for a different sensitivity to volatility spikes.

Settings

Main Settings

• ADR Calculation Period (Days): Determines the number of days used to calculate the historical average range.
• Fibs Calculation: Switches the base calculation between Basic (SMA), Standard Deviation, or Variance.
• Fibonacci Scale: A multiplier to adjust the overall width of all Fibonacci levels simultaneously.
• Dynamically Show Zones Outside ADR: If checked, extension levels beyond the 1.0 ADR will only appear if the current day's high or low exceeds the previous levels.

Visuals

• Fibonacci Levels (1-10): Individual toggles for each level, including customizable Fibonacci values, colors, and line visibility.
• Show Price Lines: Displays the specific price value next to each projected level.
• Fill Zones: Enables or disables the background shading between the Fibonacci levels.
• Plot For Today Only: Restricts the calculation and plotting to the current trading session.

FAQ

How do I use the different calculation types?

The "Basic" setting is standard for most traders. Use "Standard Deviation" if you want the levels to account for the consistency of recent price moves, providing tighter levels during quiet markets and wider levels during volatile ones.

Can I use this on a Daily chart?

By default, the script is optimized for intraday timeframes. Using it on a Daily or higher timeframe may result in limited data visualization, as the levels are designed to project intraday targets based on daily volatility.

How do I access this tool?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.