Building a Statistical Trading Edge: Average Range Levels Explained
Written by
A Sign Of Time
Head of Education & Toodegrees Analyst
Key Summary
- Average Range Levels quantify how far price is likely to move within a given timeframe.
- The 1/3 range level is a key threshold for manipulation (Judas moves).
- Range data helps distinguish expansion vs consolidation environments.
- The Average Range Levels° indicator turns volatility into actionable price levels.
Description
Average Range Levels provide a statistical framework for understanding how far price typically moves within a defined period (daily, weekly, monthly). Instead of guessing targets or stop placement, traders can anchor decisions to historical volatility behavior.
The core concept comes from the Average Daily Range (ADR), which measures the average difference between high and low over a set period.
The Toodegrees Average Range Levels° indicator expands this idea by projecting range-based price levels, incorporating time-based anchoring (New York midnight), and extending the concept into weekly (AWR) and monthly (AMR) ranges.
One of the most important levels is the 1/3 range. From an ICT perspective, the 1/3 ADR often marks the exhaustion point of a Judas move (manipulation phase). If price reacts here during key sessions (London / NY), it provides directional confirmation.
Additionally, the indicator includes a data table tracking previous ranges, which gives insight into current market conditions: small recent ranges suggest higher probability of expansion, while large recent ranges suggest higher probability of consolidation.
This transforms volatility from a background concept into a decision-making tool.
Key Questions
Average Range Levels° – Key Settings & Applications
| Setting | Function | Trading Application |
|---|---|---|
| Timeframe (ADR / AWR / AMR) | Defines range period | Align intraday vs swing bias |
| Time Anchor (NY Midnight / True Open) | Sets calculation basis | Ensures consistency with ICT models |
| 1/3 Range Levels | Marks manipulation threshold | Identify Judas / reversal zones |
| Full Range Projections | Projects expected expansion | Define TP targets |
| Historical Levels (Lookback) | Shows past ranges | Identify expansion vs consolidation |
| Data Table | Displays current vs historical range | Decide whether to trade or wait |
| Level Extension | Projects levels forward | Future reaction zones |
Range-based analysis is a core component of volatility modeling in trading. By quantifying expected price movement, traders move away from subjective decision-making and align execution with statistically observed behavior across multiple timeframes.
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