ATR/ADR Support and Resistance Levels

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ATR/ADR Support and Resistance Levels Indicator

This script is designed to provide traders with precise ATR (Average True Range) and ADR (Average Daily Range) support and resistance levels. It can be effectively used to identify price breakouts or rejections near these critical lines and assist in confirming trend retests.

How It Works:

• Support and Resistance Lines: The script plots ATR/ADR-based support and resistance lines, which can be toggled on or off.
  
• Daily Data Integration: It incorporates daily open and close prices to enhance the accuracy of the support and resistance levels.
  
• Clear Visuals: The indicator uses distinct colors for support (green) and resistance (red) levels, providing clear visual cues.
  
• Default Settings: The default settings are optimized for most trading environments. Adjusting the ATR/ADR Length can fine-tune the indicator's responsiveness to market movements.
  

Key Features:

• ATR & ADR Calculation: Choose between using ATR, ADR, or both. ATR is recommended for most scenarios.
  
• Customizable Lengths: Adjust the ATR/ADR Length to refine the average calculation to your preference, with 14 being the standard value.
  
• EMA for Market Bias: The EMA helps determine the ticker bias. It is colored green when the market is above the average price and red when it is below. This allows you to more easily determine whether or not the ADR/ATR levels are valid.
  
• Versatile Usage: Suitable for various trading types, ensuring broad applicability across different market conditions.
  

How to Use:

• ATR vs ADR: You should use ADR if you are day trading AND do not want to include gap data in the levels. It is recommended you use ATR.
  
• Bounces off Levels: When price bounces off of a support/resistance level, it is very likely that price will respect this level. This indicates that price is unlikely to move beyond the ticker's average volatility. You should wait for an additional bounce to confirm.
  
• Breakthroughs of Levels: When price breaks through a support/resistance level, it is very likely that price will continue beyond this level. This indicates that price has moved beyond that ticker's average volatility. You should wait for a bounce off the level to confirm.
  

This indicator is a valuable tool for traders seeking to enhance their technical analysis with support and resistance levels based on ATR and ADR calculations. It is perfect for identifying key price points and understanding market trends.