Exponential Moving Average with ADR band

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Indicator: Exponential Moving Average with ADR Band

This TradingView script calculates and displays an Exponential Moving Average (EMA) along with an Average Daily Range (ADR) band around it. The indicator helps traders identify potential dynamic support and resistance levels adjusted for market volatility. Especially significant moves that originate from the ZONE and reach outside should be taken seriously.

Key Features:

EMA Calculation: The script computes the Exponential Moving Average (EMA) of the closing prices over a user-defined period.

ADR Band: It calculates the Average Daily Range (ADR) using a Simple Moving Average (SMA) of the daily high-low range over the same period.

Adjustable Parameters:

Length: The period for both the EMA and the ADR calculation, which can be set by the user (default is 20).

Multiple: A multiplier for the ADR to adjust the width of the bands around the EMA (default is 1).
Plotting: The EMA is plotted as an orange line. The upper and lower ADR bands are plotted around the EMA, and the area between these bands is filled with a translucent orange color to highlight the channel.

How It Works:

EMA Calculation: The script computes the EMA of the closing prices using the specified length.

ADR Calculation: The daily range (high-low) is averaged over the same length to get the ADR.

Band Creation: The upper band is created by adding the ADR (multiplied by the user-defined multiple) to the EMA. The lower band is created by subtracting the ADR (multiplied by the user-defined multiple) from the EMA.

Visualization: The EMA and ADR bands are plotted, and the area between the bands is filled to create a clear visual representation of the ADR channel.

Usage:

This indicator can be used to gauge market volatility and potential support/resistance zones.
The ADR band provides a dynamic range that adjusts with market conditions, helping traders identify potential breakout and reversal points.

To customize the indicator, adjust the 'Length' and 'ADR multiple' parameters to suit your trading style and the specific characteristics of the asset you are analyzing.