(T_S_R)-Daily Range Calculator v2[1].0

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Author: Copyright � 2006, Ogeima
(T_S_R)-Daily Range Calculator v2[1].0

Overview

The (T_S_R) Daily Range Calculator is a specialized analytical tool designed for traders using the Trend Slope Retracement (T_S_R) system. Rather than providing direct "buy" or "sell" signals, this script acts as a mathematical compass. It calculates the available "space" in the market and determines exactly how much risk you can afford to take based on historical price movements and your desired profit goals.

How the Logic Works

The script operates through three main phases: measuring history, calculating remaining "room," and determining safe boundaries.

1. Historical Range Analysis

The tool begins by looking backward at the market's behavior over various timeframes. It automatically calculates the price range (the distance between the highest high and the lowest low) for:

  • The previous day.
  • The last 5 days.
  • The last 10 days.
  • The last 20 days.

It then averages these figures to establish an Average Day Range. This gives you a benchmark of how much price typically moves in a single day.

2. Calculating "Room" (Up and Down)

The script then looks at the current day's price action. It compares where the price is currently sitting relative to today’s highs and lows against the "Average Day Range" calculated in the previous step.

  • Room Up: This represents how many pips of movement are theoretically left before the price reaches its average daily limit, moving upward from the current low.
  • Room Down: This represents the remaining distance the price can travel downward before hitting its average daily limit, relative to today's high.

3. Risk-to-Reward Translation

This is the core utility of the script. Once it knows how much "room" is left, it applies your preferred Risk-to-Reward Ratio (a user-defined setting) to determine your maximum allowable Stop Loss.

  • For Long Trades: If you want to buy, the script calculates the maximum distance your Stop Loss can be placed so that you still maintain your desired profit ratio based on the remaining "Room Up."
  • For Short Trades: If you want to sell, it does the same for the "Room Down," telling you how far away your Stop Loss can be to remain mathematically viable.

Visual and Data Output

The script provides two primary ways to view this information:

  1. On-Screen Dashboard: A text summary appears on your chart, displaying all the raw numbers: the averages for different timeframes, the calculated "Room," and the exact price levels for your Long and Short Stop Losses.
  2. Visual Price Lines: The script draws two horizontal lines directly on your chart—a Green line for the Long Stop Loss level and a Red line for the Short Stop Loss level. These lines update in real-time as the price moves, providing a constant visual guide of your "safety boundaries."

Summary for the Trader

This tool is designed to prevent "over-reaching." It tells you: "Based on how much the market usually moves in a day, if you enter a trade right now, this is the furthest away your Stop Loss should be to ensure your trade remains mathematically sound."

Price Data Components
Series array that contains the highest prices of each barSeries array that contains the lowest prices of each bar
Miscellaneous
Implements a curve of type %1
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(T_S_R)-Daily Range Calculator v2[1].0 
//+------------------------------------------------------------------+
//|                          (T_S_R)-Daily Range Calculator v1.3.mq4 |
//|                                         Copyright © 2006, Ogeima |
//|                                             ph_bresson@yahoo.com 
//|Made for the TSR (Trend Slope Retracement) system by FXiGoR       |
//|http://strategybuilderfx.com/showthread.php?t=17252               |
//+------------------------------------------------------------------+
// For basic explanations, see the notes at the end this script.
// For information regarding the T_S_R method, read the "FXiGoR-(T_S_R) very effective Trend Slope Retracement system" thread opened by iGoR at StrategyBuilderfx, Forex-tsd, MoneyTec, ForexFactory or Trade2Win.
#property copyright "Copyright © 2006, Ogeima"
#property link      "ph_bresson@yahoo.com"

#property indicator_chart_window
#property indicator_buffers 2
#property indicator_color1 Green
#property indicator_color2 Red

//---- input parameters
extern double  Risk_to_Reward_ratio =  3.0;

double aSL_Long[];
double aSL_Short[];
int nDigits;

//+------------------------------------------------------------------+
//| Custom indicator initialization function                         |
//+------------------------------------------------------------------+
int init()
{
   IndicatorBuffers(2);
   SetIndexStyle(0,DRAW_LINE,STYLE_SOLID,3);
   SetIndexStyle(1,DRAW_LINE,STYLE_SOLID,3);
   
   SetIndexBuffer(0,aSL_Long);
   SetIndexBuffer(1,aSL_Short);
   
   SetIndexEmptyValue(0,EMPTY_VALUE);
   SetIndexEmptyValue(1,EMPTY_VALUE);

   if(Symbol()=="GBPJPY" || Symbol()=="EURJPY" || Symbol()=="USDJPY" || Symbol()=="CHFJPY" || Symbol()=="GOLD" || Symbol()=="_SP500")  nDigits = 2;
   else nDigits = 4;
   return(0);
}
//+------------------------------------------------------------------+
//| Custom indicator deinitialization function                       |
//+------------------------------------------------------------------+
int deinit()
{
   Comment("");
   return(0);
}
//+------------------------------------------------------------------+
//| Custom indicator iteration function                              |
//+------------------------------------------------------------------+
int start()
{
   int      R1=0,R5=0,R10=0,R20=0,RAvg=0;
   int      RoomUp=0,RoomDown=0,StopLoss_Long=0,StopLoss_Short=0;
   double   SL_Long=0,SL_Short=0;
   double   low0=0,high0=0;
   string   Text="";
   int      i=0;

   R1 =  (iHigh(NULL,PERIOD_D1,1)-iLow(NULL,PERIOD_D1,1))/Point;
   for(i=1;i<=5;i++)    R5    =  R5  +  (iHigh(NULL,PERIOD_D1,i)-iLow(NULL,PERIOD_D1,i))/Point;
   for(i=1;i<=10;i++)   R10   =  R10 +  (iHigh(NULL,PERIOD_D1,i)-iLow(NULL,PERIOD_D1,i))/Point;
   for(i=1;i<=20;i++)   R20   =  R20 +  (iHigh(NULL,PERIOD_D1,i)-iLow(NULL,PERIOD_D1,i))/Point;

   R5    = R5/5;
   R10   = R10/10;
   R20   = R20/20;
   RAvg  =  (R5+R10+R20)/3;    

   low0  =  iLow(NULL,PERIOD_D1,0);
   high0 =  iHigh(NULL,PERIOD_D1,0);

   RoomUp         =  RAvg - (Bid - low0)/Point;
   RoomDown       =  RAvg - (high0 - Bid)/Point;
   StopLoss_Long  =  RoomUp/Risk_to_Reward_ratio;
   SL_Long        =  Bid - StopLoss_Long*Point;
   StopLoss_Short =  RoomDown/Risk_to_Reward_ratio;
   SL_Short       =  Bid + StopLoss_Short*Point;

   Text =   "Average Day  Range: " +  RAvg + "\n"  + 
            "Prev 01  Day  Range: " +  R1   + "\n" + 
            "Prev 05  Days Range: " +  R5   + "\n" + 
            "Prev 10  Days Range: " +  R10  + "\n" +
            "Prev 20  Days Range: " +  R20  + "\n";
   Text =   Text +
            "Room Up:     " + RoomUp              + "\n" +
            "Room Down: " + RoomDown            + "\n" +
            "Max. StopLosses should be :"  + "\n" +
            "Long:  " + StopLoss_Long  + " Pips at " + DoubleToStr(SL_Long,nDigits)  + "\n" +
            "Short: " + StopLoss_Short + " Pips at " + DoubleToStr(SL_Short,nDigits) + "\n";

   Comment(Text);

   //-- SL Lines
   int limit;
   int counted_bars=IndicatorCounted();
   if(counted_bars<0) counted_bars=0;
   if(counted_bars>0) counted_bars--;
   limit =  counted_bars;

   for(i = 0 ;i <= limit ;i++)
   {
      if(i==0 || i==1 || i==2)
      {
         aSL_Long[i] =  SL_Long;
         aSL_Short[i]=  SL_Short;
      }
      else
      {
         aSL_Long[i] = EMPTY_VALUE;
         aSL_Short[i]= EMPTY_VALUE;
      }
   }
   return(0);
}
//+------------------------------------------------------------------+
/*
Here's a little "indicator" that does some basic calculations for us.

Let's look at what it does:
It computes yesterday's range, the previous 5, 10 and 20 days ranges. And it calculates the "Average Day Range" of these four ranges (yesterday's+ Prev 5 Day Range + Prev 10 Day Range + Prev 20 Day Range)/4.
So, if yesterday's Day Range was 80, the Previous 5 Day Range was 110, the Previous 10 Day Range was 90 and the Previous 20 Day Range was 120, then the Average Day Range would be 100.

Then there's "Room Up" and "Room Down".
Let's imagine today's low is (so far) 1000 and today's high is (so far) 1050. At this moment the price is 1020.
So we're 1020-1000= 20 pips above the low, there is therefore 100-20=80 pips "left" up. For a risk-to-reward ratio of (say) 3, if a long trade was to be entered now, the stop loss should be no more than 80/3=26pips away, that is at 1020-26=994. So, if all conditions are met, we ll look for a "bottom" no lower than 994.
Same thing for a short trade: we are 1050-1020= 30 pips below the high, there is therefore 100-30=70 pips "left" down. For a risk-to-reward ratio of 3, if a short trade was to be entered now, the stop loss should be no more than 70/3=23pips away, that is at 1020+23=1043. So, if all conditions are met, we ll look for a "top" no higher than 1043.

As you can see, this indicator doesn't tell us whether or not we have a set up to trade. What it does is, considering some past day ranges, and for a given Risk to Reward ratio, it tells us how far away we can put a stop loss.

Hope this helps,

Ogeima.

P.S.: I used H-L (High-Low) to compute the Ranges. They are thus a bit different from mataf.net data, which computes what is known as the "True" Ranges (= Max(High for the period less the Low for the period,High for the period less the Close for the previous period,Close for the previous period and the Low for the current period)).

--------
PS1: occasionnally, as someone apparently pointed out in the chatroom, RoomUp/RoomDown (and the indicative stop losses) will have negative values. For example, let's imagine that the Average Day Range is 100, today's High is 1150, today's low is 1000 and the current price is 1040.
Price has traveled 1150-1040 = 110 pips down from the High, that's 10 pips more than the 100 pips of the Average Day Range, so the RoomDown will be -10 pips (and the stoploss will be -10/Risk_to_Reward_ratio).

(And price has traveled 1040-1000= 40 pips from the Low so the RoomUp will be positive (=100-40=60), nothing special here.)
--------

v1.3: added 2 horizontal lines at the level of the StopLosses: Green line for Long SL, Red line for Short SL.
*/

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