ADR in gold trading
ADR, the average daily range, is the mean distance from high to low over recent days; it tells a gold trader how far a typical day travels.
Also called Average daily range, Daily range
ADR (average daily range) is the average of each day’s high minus low over a chosen number of days, commonly 10 or 20. Unlike ATR it ignores gaps between sessions and is calculated only on daily bars. It answers a simple question: how far does gold usually travel in a day? If the 20-day ADR is $45, a day that has moved $20 by the London open has, on average, more room; one that has moved $60 is already stretched.
How it applies to gold trading
Day traders use ADR to set realistic targets and to avoid chasing. A target that requires gold to move 150% of its ADR is a low-probability outcome on an ordinary day. Some traders project the ADR from the day’s low or high to estimate where the day might stall; others stop looking for continuation entries once the ADR has been consumed.
ADR also helps compare days: a CPI day with a $90 range against a $45 ADR was a two-ADR day, which is useful context when reviewing a journal, and a quiet Asian session that has used 15% of ADR is not yet a trend.
The projected high and low for the day, calculated by adding the ADR to the session low and subtracting it from the session high, are levels many day traders mark on the chart each morning.
A common mistake
Treating ADR as a ceiling. Gold exceeds its ADR regularly, especially on event days; the point is probability, not a wall.
See also: ATR, Volatility, Asian range, Day trading.
Frequently asked questions
What is gold's average daily range?
It changes with the volatility regime. Tens of dollars is typical in quiet periods and much more around events; our volatility tool shows the current ADR and ATR from recent data.
What is the difference between ADR and ATR?
ADR averages the plain high-to-low range of daily bars. ATR includes gaps from the previous close and can be calculated on any timeframe.