3 Day Average Range (3 DAR)

The Three (3) Day Average Range is the average of the last 3 days range from the real time (RTH) session. You only use the prices that trade between 9:30 and 4:15 E.S.T. for the Emini S&P 500. Once you have the average you take 80% of that number as a minimum target.

Here is an example working the ES numbers for Wednesday, 9 June 2010:

Ranges:
Fridays: 28.25
Mondays: 23.75
Tuesdays: 22.00

Total = 74 points

Divide 74 by 3 = 24.6 Points (round down to 24.5) to get the Max Range.

Take 80% of the Max Range = 19.6 (Round down to 19.5) to get the Minimum range.

As with all projection methods we are constantly looking for swing highs and lows and trying to figure out if a high or low has been put in yet for the day. After 90 minutes you have a good feel and probability for the day so that is a great time to run the numbers.

This concept was first mentioned by BruceM in a topic called Being Wrong and the 3 DAR.

Compare this to the 3 WAR.