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NIFTY

8926.10      18.25 0.20%

BANK NIFTY

20883.90      22.95 0.11%
ACC 1463.50 (-0.27%) Link
Symbol     LTP Chng%
RIIL 460.70   + 13.67
RELIANCE 1202.75   + 10.53
ORIENTCEM 145.20   + 9.54
AVANTIFEED 647.05   + 9.01
WABAG 552.55   + 5.30
Symbol     LTP Chng%
SJVN 34.15    -5.92
JPINFRATEC 10.20    -5.12
ITDCEM 152.65    -5.04
MARKSANS 48.50    -4.15
PAGEIND 13871.00    -3.42
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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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