indicator ADX-a directional movement index. It shows that there is a pronounced trend and its strength. The schedule is an indicator of the price chart from 0 to 100%. The higher the indicator value, the greater the potential for saving the current trend. The lower the value of the indicator, the more likely a change of trend.
ADX is composed of three lines, which show the volume of buying and selling. They are called:
- «+ DI» (positive directional indicator).
- «-DI» (negative directional indicator).
- ADX (average trends). Defined as the average values ??between the positive and negative directional indicator indicator).
Therefore, the greater the difference between the values ??of + DI and-DI, the greater the value of the indicator ADX.
When the market is bullish or bearish trend is the distance between lines increases and the DI indicator ADX - uveltichivaetsya.
Therefore, if the average directions ADX uvelichivaestya, it means that the market starts a trend. If the average falls the ADX, the trend is decreasing. Therefore, the greater the distance between the values ??of + \ - DI greater ADX.
Features indicator ADX
- bull market, when the line «+ DI» more «-DI»
- A bear market, a line of «-DI» more «+ DI».
ADX line on the graph indicator oscillates between 0 and 50. If it is below 20, then the market is not clearly defined trend. The increase in ADX line as above 20 °, shows the formation of a trend and is a good signal search entry points.
If the line rises above the value 50 on the chart and the indicator starts to fall down, it means that the trend at the end and should close out positions.
Signals indicator ADX
- crossing the lines of maximum \ minimum or turn the ADX on these lines.
- Frequent crossing lines + / - DI precedes the start of a new strong trend, as well as strengthening the existing trend.
- If the Line - DI + DI line below the trend is bearish.
- If the + DI line is above the line - DI is bullish trend
- If the line - \ + DI diverge, and ADX rises, it indicates a gain and an increase in the dynamics of tendetsii trend.
- If the line - \ + DI converge, and ADX decreases, this attenuation trends.
- If liiya ADX is below the value 20, a mild trend in the market.