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14677.80      -18.70 -0.13%

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ACC 1876.05 (-0.35%) Link
Symbol     LTP Chng%
OMAXE 84.55   + 14.64
WELSPUNIND 101.35   + 11.07
ASIANPAINT 2774.50   + 8.54
UPL 742.90   + 7.41
KPITTECH 221.85   + 6.56
Symbol     LTP Chng%
IBVENTURES 190.90    -8.97
JINDALSTEL 417.30    -8.61
NMDC 185.75    -8.47
SPARC 222.20    -7.51
DISHTV 12.30    -6.82
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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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