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NIFTY

10617.80      47.25 0.45%

BANK NIFTY

25010.90      196.50 0.79%
ACC 1545.40 (-1.42%) Link
Symbol     LTP Chng%
YESBANK 352.40   + 8.35
JMFINANCIL 135.30   + 7.94
BFUTILITIE 431.10   + 7.94
DEN 102.20   + 7.35
HATHWAY 34.85   + 7.23
Symbol     LTP Chng%
RNAVAL 19.35    -15.13
DCMSHRIRAM 325.55    -11.87
BHUSANSTL 26.60    -9.98
JSL 96.25    -6.19
HDIL 36.95    -5.74
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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