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NIFTY

9108.00      21.70 0.24%

BANK NIFTY

21122.55      227.05 1.09%
ACC 1396.45 (-0.31%) Link
Symbol     LTP Chng%
WABCOINDIA 6028.30   + 12.22
SFCL 138.40   + 9.45
KEC 208.20   + 9.35
DCMSHRIRAM 298.50   + 7.94
WELSPUNIND 86.60   + 7.58
Symbol     LTP Chng%
NLCINDIA 109.80    -8.84
JINDALSTEL 119.75    -4.58
SADBHAV 308.65    -3.56
SREINFRA 86.00    -3.32
BRFL 133.00    -3.27
View All

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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