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NIFTY

16887.00      -207.00 -1.00%

BANK NIFTY

30093.30      -260.95 -0.86%
ACC 2301.00 (-5.00%) Link
Symbol     LTP Chng%
COCHINSHIP 485.00   + 10.00
VIPIND 715.00   + 7.00
RVNL 36.00   + 7.00
LUPIN 722.00   + 6.00
AUROPHARMA 535.00   + 5.00
Symbol     LTP Chng%
SUZLON 8.00    -9.00
ADANIGREEN 2074.00    -8.00
ESSELPACK 251.85    -7.66
EICHERMOT 3463.00    -6.00
INDIACEM 254.00    -6.00
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Average Directional Index (ADX)

Introduction

ADX is an indicator used in technical analysis as an objective value for the strength of trend. ADX is non-directional indicator, so it will quantify a trend's strength regardless of whether its value is up or down. ADX is usually plotted in a chart window along with two lines known as the DMI (Directional Movement Indicators). ADX is derived from the relationship of the DMI lines.

Analysis of ADX is a method of evaluating trend and can help traders to choose the strongest trends and also how to let profits run when the trend is strong.

Formula

First Adx14 = 14 Period Average of DX
Second Adx14 = ((First Adx14 * 13) + Current DX value) / 14
Subsequent ADX14 = ((Prior ADX14 * 13) + Current DX Value) / 14

Advantage

The Average Directional Index (ADX) is used to measure the strength or weakness of a trend, not the actual direction. Directional movement is defined by +DI and -DI. In general, the bulls have the edge when +DI is greater than - DI, while the bears have the edge when - DI is greater. Crosses of these directional indicators can be combined with ADX for a complete trading system.

Sample Calculation

Technical chart for ADX

Technical Indicators

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