Technical Studies Reference

Average Daily Range

This study calculates and displays a Moving Average of the Daily Range of the price data.

Let the Low Price and High Price at Index $$t$$ be denoted as $$L_t$$ and $$H_t$$, respectively. Let the Input Length be denoted as $$n$$. Then we denote the Daily Range at Index $$t$$ as $$DR_t$$. We calculate the Daily Range for $$t \geq 0$$ as follows.

$$DR_t = H_t - L_t$$

We denote the Average Daily Range at Index $$t$$ for the given Length as $$\overline{DR}_t(n)$$, and we calculate it in terms of a Simple Moving Average for $$t \geq n - 1$$ as follows.

$$\overline{DR}_t(n) = MA_t(DR,n)$$

In the above formula, $$DR$$ is a random variable denoting the Daily Range.

This study only functions properly on a Historical Daily chart. A Historical Daily chart can be opened with File >> Find Symbol >> [select symbol] >> Open Historical Chart.

Once you add this study to a Historical Daily chart, the study can be overlaid to an Intraday chart by using the Study/Price Overlay study.