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NIFTY

10653.45      68.70 0.65%

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ACC 1571.35 (1.16%) Link
Symbol     LTP Chng%
J&KBANK 47.10   + 12.28
RUPA 355.55   + 9.91
LAXMIMACH 6154.95   + 5.85
GRAPHITE 1059.00   + 5.00
VMART 2206.20   + 5.00
Symbol     LTP Chng%
REPCOHOME 336.00    -9.41
DHFL 248.35    -7.61
IBULHSGFIN 844.60    -6.92
8KMILES 114.15    -4.99
VAKRANGEE 35.90    -4.90
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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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