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NIFTY

9873.30      -26.30 -0.27%

BANK NIFTY

24213.35      60.70 0.25%
ACC 1712.00 (-1.30%) Link
Symbol     LTP Chng%
STRTECH 207.20   + 19.98
RENUKA 16.55   + 10.33
JUSTDIAL 378.05   + 6.66
EROSMEDIA 234.30   + 5.71
DEEPAKFERT 299.45   + 5.64
Symbol     LTP Chng%
WABAG 602.95    -9.78
KEC 294.60    -5.35
CANBK 351.90    -5.21
SHILPI 42.80    -4.99
VIDEOIND 25.30    -4.89
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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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