1. The ADX line represents the strength of the trend. The higher the ADX line, the stronger the trend. 2. The +DI (positive directional indicator) line represents the upward movement of the market. 3. The -DI (negative directional indicator) line represents the downward movement of the market.
The ADX indicator is calculated using the following formula:
ADX = Moving Average of DX
DX = (ATR ÷ Close) x 100
Where: - ATR (Average True Range) is a measure of volatility - Close is the current closing price - DX is a measure of the direction of movement
The ADX value ranges from 0 to 100, with values above 25 indicating a strong trend, and values below 20 indicating a weak trend or a non-trending market. Traders use the ADX indicator to identify potential buy and sell signals, such as when the ADX line crosses above or below a certain threshold or when the +DI and -DI lines cross.
Average Directional Index ADX
Technical Indicator
1. The ADX line represents the strength of the trend. The higher the ADX line, the stronger the trend. 2. The +DI (positive directional indicator) line represents the upward movement of the market. 3. The -DI (negative directional indicator) line represents the downward movement of the market.
The ADX indicator is calculated using the following formula:
ADX = Moving Average of DX
DX = (ATR ÷ Close) x 100
Where: - ATR (Average True Range) is a measure of volatility - Close is the current closing price - DX is a measure of the direction of movement
The ADX value ranges from 0 to 100, with values above 25 indicating a strong trend, and values below 20 indicating a weak trend or a non-trending market. Traders use the ADX indicator to identify potential buy and sell signals, such as when the ADX line crosses above or below a certain threshold or when the +DI and -DI lines cross.