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# How to calculate daily adr forex?

The foreign exchange market is among the largest financial markets in the world, and it is becoming increasingly popular among traders and investors. The daily average range (ADR) is a metric used by traders to measure the volatility of a currency pair, which is important in determining the potential profits and risks in a trade. In this article, we will explain how to calculate daily ADR forex.

Before we delve into the process of calculating ADR, it is essential to understand the definition of the term. ADR is a metric that measures the average daily price movement of a currency pair within a specific period. It is calculated by taking the average of the highest and lowest prices of a currency pair within a day. Traders use this metric to assess the potential gains or losses of a trade and set their stop loss and take profit levels accordingly.

### Step 1: Choose a currency pair

The first step is to choose a currency pair that you want to calculate the ADR for. You can choose any currency pair, but it is advisable to select the ones that have high liquidity and volatility. Examples of such pairs include EUR/USD, GBP/USD, USD/JPY, and AUD/USD.

### Step 2: Determine the time frame

The second step is to determine the time frame that you want to calculate the ADR for. You can choose any period, but it is recommended to use a minimum of 20 trading days to get an accurate ADR reading. However, you can also use a shorter time frame if you are a day trader.

### Step 3: Find the high and low price of the currency pair

The next step is to find the high and low price of the currency pair within each trading day. You can use any charting platform or software to determine the high and low price. For instance, if you are using the EUR/USD currency pair, you can check the highest and lowest price for the day.

### Step 4: Calculate the daily ADR forex

Once you have found the high and low price of the currency pair for each trading day, you can now proceed to calculate the daily ADR forex. To do this, you need to add the high and low prices and divide the sum by two. The formula for calculating the daily ADR forex is as follows:

### ADR = (High + Low) / 2

For instance, if the high price of the EUR/USD currency pair is 1.2000 and the low price is 1.1900, the daily ADR forex would be:

### Step 5: Calculate the average ADR forex

The final step is to calculate the average ADR forex for the chosen time frame. To do this, you need to add up the daily ADR forex for each trading day and divide the sum by the number of trading days. The formula for calculating the average ADR forex is as follows: