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technical_indicators:average_directional_index_adx [2019/09/07 00:22] betseyp [Overall Downtrend with -DI Crossing above +DI] |
technical_indicators:average_directional_index_adx [2023/06/05 15:06] jayanthi [Calculation] |
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| ====== Average Directional Index (ADX) ====== | ====== Average Directional Index (ADX) ====== | ||
| - | ===== Introduction ===== | + | ===== What Is the Average Directional Index (ADX)? ===== |
| The Average Directional Index (ADX), Minus Directional Indicator (-DI) and Plus Directional Indicator (+DI) represent a group of directional movement indicators that form a trading system developed by Welles Wilder. Although Wilder designed his Directional Movement System with commodities and daily prices in mind, these indicators can also be applied to stocks. | The Average Directional Index (ADX), Minus Directional Indicator (-DI) and Plus Directional Indicator (+DI) represent a group of directional movement indicators that form a trading system developed by Welles Wilder. Although Wilder designed his Directional Movement System with commodities and daily prices in mind, these indicators can also be applied to stocks. | ||
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| Wilder features the Directional Movement indicators in his 1978 book, //New Concepts in Technical Trading Systems//. This book also includes details on [[:technical_indicators:average_true_range_atr|Average True Range (ATR)]], the [[:technical_indicators:parabolic_sar|Parabolic SAR]] system and [[:technical_indicators:relative_strength_index_rsi|RSI]]. Despite being developed before the computer age, Wilder's indicators are incredibly detailed in their calculation and have stood the test of time. | Wilder features the Directional Movement indicators in his 1978 book, //New Concepts in Technical Trading Systems//. This book also includes details on [[:technical_indicators:average_true_range_atr|Average True Range (ATR)]], the [[:technical_indicators:parabolic_sar|Parabolic SAR]] system and [[:technical_indicators:relative_strength_index_rsi|RSI]]. Despite being developed before the computer age, Wilder's indicators are incredibly detailed in their calculation and have stood the test of time. | ||
| - | ===== Calculation ===== | + | ===== How To Calculate ADX ===== |
| Directional movement is calculated by comparing the difference between two consecutive lows with the difference between their respective highs. | Directional movement is calculated by comparing the difference between two consecutive lows with the difference between their respective highs. | ||