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Technical Studies Reference


ADX

Average Directional Movement Index. This is calculated according to the Welles Wilder formulas.

How ADX is calculated:

Given the Open, High, Low and Close data for the bars in the chart, the True Range (TR) is calculated. Refer to True Range for the calculation method.

+DM is calculated as the largest part of the current range (High minus Low) that is outside of the previous range if it is up.

-DM is calculated as the largest part of the current range (High minus Low) that is outside of the previous range if it is down.

n equals the DX Length Input.

A summation of the True Range values (STR) over n periods is calculated, by the formula:
Current STR = Previous STR - (Previous STR/n) + TR.

A summation of the +DM values (+SDM) over n periods is calculated, by the formula:
Current +SDM = Previous +SDM - (Previous +SDM/n) + (+DM).

A summation of the -DM values (-SDM), over n periods is calculated, by the formula:
Current -SDM = Previous -SDM - (Previous -SDM/n) + (-DM).

The Plus Directional Indicator (+DI) is calculated by dividing +SDM by the True Range (STR).

The Minus Directional Indicator (-DI) is calculated by dividing -SDM by the True Range (STR).

The absolute value (DI DIFF) is calculated as +DI minus the -DI.

Similarly DI SUM is equal to the Sum of +DI and the -DI.

The Direction Movement Index (DX) is calculated by dividing the DI DIFF by the DI SUM.

The ADX is calculated by smoothing the Direction Movement Index (DX) with a Wilder's Moving Average of length set by the DX Moving Average Length Input.


*Last modified Monday, 24th April, 2017.