| Average Directional Movement Index ADX Type: Oscillator (trend detection) The ADX is an excellent indicator to measure a trend. The greater the ADX is, the stronger the trend is. However, the ADX states nothing about a trend direction! ADX Calculation: to be done | Interpretation: -
A value more than 25 signals a trend market. -
If the ADX of higher values decreases it is very probably that the trend finds an end and goes in a sidelong-trend over. It is a good time to sell. -
If the ADX decreases - a trend weakens, and you should trade no more trend systems (in this case oscillators are more successful) -
If the ADX remains low one speaks of a level market. The longer an ADX remains low, the more probably becomes a stronger trend. -
If the ADX rises by 4-5 points (for example, from 15 to 20), you should trade, because a stronger trend stands out -
Please notice that a high ADX value states nothing about the trend direction! (both directions are possible) - but only about the trend strength. Settings: Typically 10 or 14 days
| 
|