The Complete

ADR Method

for Premium Members

Simple, Accurate
Targets
A move worth
1.42, or $1420
per contract
traded!

Today’s Primary
ADR Bear Target
was reached in
Crude Oil at 101.16
Forecasting Targets
The PivotBoss approach to taking profits relies upon
forecasting targets based on average price movement and
utilizing actual profit targets.
• Average price movement
provides a price-based method
to forecasting targets

• Trading to high-probability
targets yields consistent results

• Using profit targets allows you

to more easily incorporate risk
management measures

• Trading to profit targets is the

PivotBoss preferred approach
What is The ADR
Method?
The ADR Method is a simple, yet powerful, method used for
forecasting targets using average price range in any
timeframe.
• Helps you forecast targets
with a high degree of
accuracy (>70%!)

• Auto-adjusts to current
market volatility and behavior

• Helps identify targets for any

duration of trade

• Simple; effective - and it

works!
Why Use ADR Targets?
Average Daily Range has been used by professionals for years,
because it provides a price-based approach that relies on
current price behavior.

• Simple; easy to implement

• Self-adjusts to current volatility
• Helps provide reasonable price range expectations
for the upcoming period of time
• Allows you to easily forecast bull and bear targets,
regardless of timeframe
• Allows you to anticipate market behavior, including
breakouts (expansion) and range markets
(compression)
What is ADR?
Average Daily Range (ADR) is calculated by averaging
the sum of the daily ranges over a given period of time.
• Daily range refers to the High
minus the Low of the day,
including extended hours
trading

• ADR refers to averaging the

daily ranges over a string of
days

• The ADR Method primarily uses

a 10-day average, but other
periodicities can be used

• ATR can be a valid substitute for

ADR, but the targets are
Calculating ADR
Numerical Formula: ADR (5)
AVERAGE((H-L), 5) 29.45

Day 1 Day 2 Day 3 Day 4 Day 5 Day 6

44.25 25.75 23.75 27.75 25.75 32.25
Multiple Day Ranges
A Multiple Day Range (MDR) uses the highest high and the
lowest low over a given number of days to identify the range.

• The highest high minus the

lowest low over a given number
of days

• The MDR, and its average, is

used to identify great swing
targets

• The ADR Method primarily uses

a 5-day calculation, but other
periodicities can be used, like 3,
10, and 20 day averages
MDR Forecasting
MDRs help temper your expectations for price
movement and provide a price-based method for
forecasting reliable targets.

• Provides reliable price extremes

for the upcoming n-number of
days

• Regardless of direction, bull and

bear targets give you great
approximations for your trades

• The Method takes into account

abnormally high/low range MDRs,
which allows you to forecast
better targets
Calculating the MDR
The MDR calculation uses a “rolling” method, whereby the
oldest day in the string is dropped when a new day is added.

3DR
3DR 1:
1:
2 3 1-3
1-3
3DR
3DR 2:
2:
2-4
2-4
1 4 3DR
3DR 3:
3:
3-5
3-5
5 7 3DR
3DR 4:
4:
4-6
4-6
6
6 3DR
3DR 5:
5:
5-7
5-7
Calculating Avg MDR
Numerical Formula:
AVERAGE((HHV(3)-LLV(3)), 5)
3DR 1 3DR 2 3DR 3 3DR 4 3DR 5 Avg 3DR (5)
=
26.25 37.00 60.75 57.00 45.50 45.30

FORECASTING WITH MDR

The
The 5-period
5-period average
average 3-day
3-day range
range of
of 45.30
45.30 indicates
indicates that
that
the
the price
price range
range of
of the
the upcoming
upcoming 33 days
days should
should be
be around
around
45.30
45.30 on
on average.
average.

In
In the
the actual
actual example
example above,
above, the
the price
price range
range of
of the
the next
next
3
3 days
days was
was 46.50.
46.50.
Forecasting Pro-Style
ADR
Targets ADR
ADR
Daily WEEKLY
MONTHLY
TARGETS TARGETS
Utilizes
TARGETS
Utilizes average
average Utilizes
Utilizes weekly
weekly avg
avg
daily
daily range
range to
to range
range to
to forecast
forecast 5-
5- Utilizes
Utilizes monthly
monthly avg
avg
forecast
forecast intraday
intraday day
day targets
targets range
range toto forecast
forecast 4-
4-
targets
targets week
week targets
targets
••Simple;
Simple; effective
effective
••Simple;
Simple; effective
effective ••Great
Great for
for swing
swing ••Simple;
Simple; effective
effective
••Can
Can be
be used
used for
for trading
trading and
and range
range ••Great
Great for
for longer
longer
any
any style
style of
of trading;
trading; forecasting
forecasting term
term swing
swing trades
trades
numerous
numerous targets
targets ••Price-based;
Price-based; self-
self- ••Price-based;
Price-based; self-
self-
••Price-based;
Price-based; self-
self- adjusts
adjusts toto current
current adjusts
adjusts toto current
current
adjusts
adjusts to
to current
current volatility
volatility volatility
volatility
volatility
volatility ••Uses
Uses average
average ••Great
Great for
for markets
markets
••Success
Success rates
rates over
over weekly
weekly ranges
ranges for
for poised
poised for
for expansion
expansion
OVERVIEW: Base
Calculations
ADR
TARGETS
All
All ADR
ADR Targets
Targets are
are based
based on
on
percentages
percentages of
of Average
Average Daily
Daily
Range.
Range.
••50%
50% Target:
Target: Compression
Compression
Target
Target
••75%
75% Target:
Target: Primary
Primary Target
Target
••100%
100% Target:
Target: Secondary
Secondary
Target
Target
••125%
125% Target:
Target: Extended
Extended
Target
Target
ADR Daily Targets
ADR
ADR Daily Targets use Average Daily Range to forecast reliable
and accurate targets for each session.

Daily ADR Daily

TARGETS TARGETS
Utilizes
Utilizes average
average TGT
daily
daily range
range to
to
forecast
forecast intraday
intraday
targets
targets
+ADR
••Simple;
Simple; effective
effective
••Can
Can be
be used
used for
for
any
any style
style of
of trading;
trading; ONL
numerous
numerous targets
targets
••Price-based;
Price-based; self-
self-
adjusts
adjusts to
to current
current
volatility
Base Calculations
PRIMARY SECONDARY
TARGET TARGET
Projects
Projects 75%
75% of
of ADR
ADR higher
higher Projects
Projects 100%
100% of
of ADR
ADR higher
higher
from
from the
the ONL,
ONL, and
and lower
lower from
from from
from the
the ONL,
ONL, and
and lower
lower from
from
ONH
ONH ONH
ONH
••Uses
Uses 75%
75% ofof ADR
ADR ••Uses
Uses 100%
100% of of ADR
ADR
••BULL:
BULL: ONL
ONL ++ (ADR
(ADR xx .75)
.75) ••BULL:
BULL: ONL
ONL ++ ADR
ADR
••BEAR:
BEAR: ONH
ONH -- (ADR
(ADR xx .75)
.75) ••BEAR:
BEAR: ONH
ONH -- ADR
ADR
••Accuracy
Accuracy of
of >80%
>80% ••Accuracy
Accuracy ofof >50%
>50%
••Use
Use as
as the
the primary
primary target
target ••Use
Use as
as aa secondary
secondary target
target
••Use
Use 5-
5- or
or 10-day
10-day ADR
ADR ••Use
Use 5-
5- or
or 10-day
10-day ADR
ADR
75% Primary Target
ONH:
102.58

75% Target = ONH - (1.90

x .75)

10-day ADR = Primary Target

1.90 (75%): 101.16
100% Secondary
Target
Secondary
Target (100%):
3244.75

100% Target = Low + ADR

(31.75)

10-day ADR =
31.75 Low: 3213
Additional Calculations
COMPRE EXTENDE GAP
SSION D ADJUSTED
TARGET TARGET TARGET
Projects
Projects 125%
125% ofof ADR
ADR Projects 50% of ADR
Projects Projects 50% of ADR
Projects 50%
50% of of higher
higher from
from the
the ONL,
ONL, higher and lower from
ADR higher and lower from
ADR higher
higher from
from and
and lower
lower from
from the
the the day’s Open price
the the day’s Open price
the ONL,
ONL, and
and lower
lower ONH
ONH
from
from ONH
ONH ••Uses
Uses 50%
50% of
of ADR
ADR
••Uses
Uses 125%
125% ofof ADR
ADR ••BULL:
BULL: Open
Open ++ (ADR
(ADR
••Uses 50% of ADR •
Uses 50% of ADR •BULL: BULL: ONL
ONL ++ (ADR
(ADR xx xx .50)
.50)
••BULL: ONL + ADR
BULL: ONL + ADR 1.25)1.25)
•
••BEAR:
BEAR: Open
Open -- (ADR
(ADR
••BEAR: ONH -
BEAR: ONH - ADRADR •BEAR:
BEAR: ONH
ONH -
- (ADR
(ADR x
x
1.25) xx .50)
.50)
1.25)
50% Compression
Target Use the compression
10-day ADR = target:
13.80 1. In a trading range
market
2. If the prior day’s price
range was much greater
than average
1244.20

50% Target = Low + (ADR x Low:

.50) 1237.30
125% Extended Target
Extended
Use the Target (125%):
extended target 1257.20
when price has
been coiling in
the prior session

Low:
1239.10

10-day ADR = 125% Target = Low - (14.50 x

14.50 1.25)
Gap Adjusted Target
10-day ADR =
141

GA Bull Target = Open + (ADR x .5)

GA Bear Target = Open - (ADR x .5)
When a large gap occurs
at the open, look to use GA Bull (50%):
the Gap Adjusted method 15108
for calculating targets,
which uses a 50%
projection from the day’s
Open. Open:
15038
ADR Weekly Targets
ADR Weekly Targets use Average Weekly Range (AWR) to
ADR
forecast reliable and accurate targets on a week by week
basis.
WEEKLY ADR WEEKLY
TARGETS TARGETS
Utilizes
Utilizes weekly
weekly avg
avg
range
range toto forecast
forecast 5-
5-
day
day targets
targets
••Simple;
Simple; effective
effective +AWR
••Great
Great for
for swing
swing
trading
trading and
and range
range
forecasting
forecasting WL
••Price-based;
Price-based; self-
self-
adjusts
adjusts toto current
current
volatility
volatility
••Uses average
AWR Forecasting
Average Weekly Range helps temper expectations for price
range and provides a price-based method for forecasting
targets for the week.
• Use AWR to forecast potential
price extremes for the upcoming
week

• Identifying the potential price

range for a given week helps to
manage price range expectations

• Projecting targets from Monday’s

high/low provides solid targets
for the week

• Using a confirmed high or low for

the week helps to pinpoint the
best targets
Base Calculations
Base TARGET
The base calculations for forecasting with Average Weekly

INITIAL
Range are consistent with all other ADR Method calculations.
CALCULATION
FORECAST
Projects
S
Projects AWR
AWR higher
higher and
and
lower
lower from
from the
the prior
prior week’s
week’s Use
Use the
the Primary
Primary (75%)
(75%) and
and
closing
closing price
price Secondary
Secondary (100%)
(100%)
calculations
calculations for
for weekly
weekly
••Uses
Uses 100%
100% of of AWR
AWR targets
targets
••BULL:
BULL: PWC
PWC + + AWR
AWR
••BEAR:
BEAR: PWC
PWC -- AWR
AWR ••Primary
Primary [uses
[uses 75%
75% ofof AWR]
AWR]
••Used
Used to
to determine
determine range
range •• BULL:
BULL: WL
WL +
+ (AWR
(AWR xx .75)
.75)
expectations
expectations for
for the
the next
next •• BEAR:
BEAR: WH
WH -- (AWR
(AWR xx .75)
.75)
week
week ••Secondary
Secondary [uses
[uses 100%
100% of
of
••Average
Average price
price range
range AWR]
AWR]
suggests
suggests that
that price
price should
should •• BULL:
BULL: WL
WL +
+ AWR
AWR
remain
remain within
within the
the projected
projected •• BEAR:
BEAR: WH
WH -- AWR
AWR
The Initial Forecast
Bull: PWC + AWR =
38.04
T: $38.04
Bear: PWC - AWR =
34.04
AWR = 2.00

PWC:
$36.04

The Initial Forecast is

designed to give you the
estimated price range for
the upcoming week B: $34.04
Plotting the Real
Targets
N Bull: WL + AWR
NL Bull: WL + (AWR x .75) N: $37.86
NL Bear: WH - (AWR x .75) NL:
N Bear: WH - AWR $37.36
AWR = 2.00
H:
$36.37
L:
$35.86

NL:
Use Mon’s H/L to forecast $34.87
Weekly targets; update N: $34.37
the targets should a new
H/L form
Targets Reached
N Bull: WL + AWR
NL Bull: WL + (AWR x .75) N: $37.86
NL Bear: WH - (AWR x .75) NL:
N Bear: WH - AWR $37.36
AWR = 2.00
H:
$36.37
L:
$35.86

N: $34.87
Price traded right into our N: $34.37
forecasted bull targets
Initial Forecast Helped
The Initial Forecast gave us
a great starting point for
N: $37.86
identifying the week’s
potential price range NL:
$37.36

N: $34.87
N: $34.37
ADR Monthly Targets
ADR Monthly Targets use Average Monthly Range (AMR) to
forecast reliable and accurate targets on a month by month
ADR basis.

MONTHLY ADR MONTHLY

TARGETS TARGETS
Utilizes
Utilizes monthly
monthly avg
avg
range
range toto forecast
forecast 4-
4-
week
week targets
targets
+AMR
••Simple;
Simple; effective
effective
••Great
Great for
for longer
longer
term
term swing
swing trades
trades ML
••Price-based;
Price-based; self-
self-
adjusts
adjusts toto current
current
volatility
volatility
••Great for markets
Base Calculations
The base calculations for forecasting with Average
Monthly Range are consistent with all other ADR Method
INITIAL Base TARGET
calculations.

FORECAST CALCULATION
Projects
Projects AMR
lower
AMR higher
higher and
and S
lower from
from the
the prior
prior month’s
month’s
closing
closing price
price The
The Primary
Primary and
and Secondary
Secondary
base
base calculations
calculations are
are used
used for
for
••Uses
Uses 100%
100% of of AMR
AMR targets
targets
••BULL:
BULL: PMC
PMC + + AMR
AMR
••BEAR:
BEAR: PMC
PMC -- AMR
AMR ••Primary
Primary [75%
[75% of
of AMR]
AMR]
••Used
Used to
to determine
determine range
range •• BULL:
BULL: ML
ML +
+ (AMR
(AMR xx .75)
.75)
expectations
expectations for
for the
the next
next •• BEAR:
BEAR: MH
MH -- (AMR
(AMR xx .75)
.75)
month
month ••Secondary
Secondary [100%
[100% of of AMR]
AMR]
••Average
Average price
price range
range •• BULL:
BULL: ML
ML +
+ AMR
AMR
suggests
suggests that
that price
price should
should •• BEAR:
BEAR: MH
MH -- AMR
AMR
remain
remain within
within the
the projected
projected
The Initial Forecast
Bull: PMC + AMR =
1447.50
Bear: PMC - AMR = 1447.50
1177.30

PMC:
AMR = 135.10 1312.40

The Initial Forecast

projects the AMR
higher and lower
from the prior
month’s close price. 1177.30
Plotting the Real
Targets
AMR = 135.10

100%:
1417.50
75%:
1383.70
H:
1330.70
L:
1282.40
100%: ML + AMR
75%: ML + (AMR x .75) 75%:
75%: MH - (AMR x .75) 1229.40
100%:
100%: MH - AMR 1195.60
Adjusting Targets
Adjust the targets with a
new monthly high or low
100%:
1406.90
75%:
1373.10

H:
AMR = 135.1 1330.70
L:
100%: ML + AMR 1271.80
75%: ML + (AMR x .75) 75%:
75%: MH - (AMR x .75) 1229.40
100%: MH - AMR 100%:
1195.60
Targets Reached

100%:
1406.90
75%:
1373.10

75%:
1229.40
100%:
1195.60
ADR Swing Targets
ADR Swing Targets use average price movement and multiple-
ADR
day ranges in order to forecast reliable and accurate targets.

SWING ADR SWING

TARGETS TARGETS
Utilizes
Utilizes multiple-day
multiple-day TGT
ranges
ranges toto forecast
forecast
reliable
reliable targets
targets
••Simple;
Simple; effective
effective +aMDR
••Can
Can bebe used
used for
for
any
any style
style of
of trading
trading
and
and inin any
any FDL
timeframe
timeframe
••Price-based;
Price-based; self-
self-
adjusts
adjusts toto current
current
Base Calculations
PRIMARY
SECONDARY
TARGET
Projects
TARGET
Projects 75%
75% of
of Avg
Avg MDR
MDR
higher
higher from
from the
the FDL,
FDL, and
and Projects
Projects Avg
Avg MDR
MDR higher
higher from
from
lower
lower from
from FDH
FDH the
the FDL,
FDL, and
and lower
lower from
from FDH
FDH
••Uses
Uses 75%
75% of of Avg
Avg MDR
MDR ••Uses
Uses 100%
100% of of Avg
Avg MDR
MDR
••BULL:
BULL: FDL
FDL + + (Avg
(Avg MDR
MDR ••BULL:
BULL: FDL
FDL ++ Avg
Avg MDR
MDR
xx .75)
.75) ••BEAR:
BEAR: FDH
FDH -- Avg
Avg MDR
MDR
••BEAR:
BEAR: FDHFDH -- (Avg
(Avg MDR
MDR xx .75)
.75) ••Accuracy
Accuracy ofof ~45%
~45%
••Accuracy
Accuracy of of ~70%
~70% ••Use
Use as
as aa secondary
secondary target
target
••Use
Use asas the
the primary
primary target
target ••Use
Use 3-,
3-, 5-,
5-, and
and 10-day
10-day
••Use
Use 3-,
3-, 5-,
5-, and
and 10-day
10-day ranges
ranges
ranges
ranges
100% Secondary
Target
The Normal calculation projects the average MDR higher from
the
First Day Low (FDL), and lower from the First Day High (FDH).
SECONDARY The Normal calculation
projects 100% of the Avg
TARGET MDR

Projects TGT
Projects Avg
Avg MDR
MDR higher
higher
from
from the
the FDL,
FDL, and
and lower
lower
from
from FDH
FDH
••Uses
Uses 100%
100% ofof Avg
Avg MDR
MDR +aMDR
••BULL:
BULL: FDL
FDL ++ Avg
Avg MDR
MDR
••BEAR:
BEAR: FDH
FDH -- Avg
Avg MDR
MDR
••Accuracy
Accuracy ofof ~45%
~45% FDL
••Use
Use as
as aa secondary
secondary Great secondary target, and
target
target also helps to forecast future
••Use
Use 3-,
3-, 5-,
5-, and
and 10-day
10-day price range
ranges
ranges
100% Swing Target
100% Secondary: FDL +
aMDR
100% Secondary: 32.17 +
Bull:
1.63
$33.80

L:
$32.17

10-day MDR =
1.63
100% Swing Target
100% Secondary: FDL +
aMDR
100% Secondary: 105.28
+ 4.38

Bull:
$109.96

r y :
nt 8
E . 5
0 5
$1
L: 8
5 .2
1 0 7-day MDR =
$
4.38
75% Primary Target
The Primary calculation projects 75% of average MDR higher
PRIMARY
from the First Day Low (FDL), and lower from the First Day
High (FDH).
CALCULATI The Primary calculation

ON projects 75% of the Avg MDR

Projects
Projects 75%
75% of
of Avg
Avg MDR
MDR
higher
higher from
from the
the FDL,
FDL, and
and TGT
lower
lower from
from FDH
FDH
••Uses
Uses 75%
75% ofof Avg
Avg MDR
MDR +aMDR
••BULL:
BULL: FDL
FDL ++ (Avg
(Avg MDR
MDR x .75
xx .75)
.75)
••BEAR:
BEAR: FDH
FDH -- (Avg
(Avg MDR
MDR FDL
xx .75)
.75)
••Accuracy Great primary target, with a
Accuracy of of ~70%
~70%
••Use success rate of over 70%
Use asas the
the primary
primary
target
75% Target
75% Primary: FDL + (aMDR
x .75)
75% Primary: 32.17 + (1.63
x .75)
NL Bull:
$33.39

L:
$32.17

10-day MDR =
1.63
75% Target
10-day MDR =
2.90

H:
$68.08

Bear:
$65.90

75% Primary: FDH - (aMDR

x .75)
75% Primary: 68.08 - (2.90
x .75)
ADR Range-Based
Setups
ADR Range-Based setups provide a price-based method for
determining when to expect powerful breakouts, or range
trading.

RANGE RANGE
CONTRACTIO EXPANSION
N EXPECTED EXPECTED
If
If the
the current
current range
range isis If
If the
the current
current range
range is
is 35%
35%
25%
25% greater
greater than
than smaller
smaller than
than average,
average, then
then
average,
average, then
then expect
expect expect
expect aa major
major breakout
breakout
range
range contraction
contraction in
in the
the opportunity
opportunity ahead.
ahead.
day(s)
day(s) ahead.
ahead.
Wide
WIDE
Range ADRs
WIDE
If the current range, whether single day or multi-day, is at least
25% greater than average, range contraction usually follows.
ADR The Wide Range ADR setup
Signals
Signals potential
potential helps identify when price
range
range contraction
contraction may begin a compression
ahead
ahead phase

••Predicts
Predicts
contraction
contraction
••Traditionally
Traditionally aa 1-,
1-,
3-
3- or
or 5-bar
5-bar pattern
pattern
••The
The pattern
pattern
develops
develops whenwhen the
the
current
current n-bar
n-bar range
range
is
is at
at least
least 25%
25%
greater
greater than
than
average
average
••Can
Can forecast
forecast aa
Wide ADR
For best results, Wide ADRs generally
the current range indicate range
should be at least contraction in the
25% greater than days ahead
average
Narrow Range ADRs
NARROW
If the current range, whether single day or multi-day, is at least
35% smaller than average, expansion usually follows.
ADR
The Narrow Range ADR
Signals
Signals potential
potential setup helps identify when
range
range expansion
expansion price may be ripe for a
ahead
ahead breakout/expansion
••Predicts
Predicts breakouts
breakouts
••Traditionally
Traditionally aa 1-,
1-,
3-
3- or
or 5-bar
5-bar pattern
pattern
••The
The pattern
pattern
develops
develops whenwhen the
the
current
current n-bar
n-bar range
range
is
is at
at least
least 35%
35%
smaller
smaller than
than
average
average
••Can
Can forecast
forecast huge
huge
Narrow ADR
Narrow range days
For best results, lead to expansion
the current range days
should be at least
35% smaller than
average
Contact Me!

Frank Ochoa
Author, Educator, Trader
Twitter: @PivotBoss frank@[Link]
Shop: [Link] [Link]