ADX – Indicator

ADX – Indicator

ADX – Indicator – Amibroker Coding AFL

The ADX (Average Directional Index) is a creation from technical analysis legend J. Welles Wilder.

The ADX is a lagging indicators used to assess the strength of a trend.

The ADX can be used on any trading time frame to determine key turning points in the market. In addition to identifying trending markets and pivots, the Average Directional Index is also used to identify choppy markets.

The ADX ranges from 0 to 100. Average Directional Index values above 40 generally imply trending markets, while readings below 20 indicate flat trading.

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Trading with the ADX  

If you are a breakout trader, you will want to avoid trading when the ADX technical indicators is below 40. What will often happen if you put a trade on with the ADX under 40, is the stock will tend to produce false breakouts, or even worse, trend sideways for an extended period of time.

ADX-BS – Download ADX – BS AFL

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ADX Indicator

Also Read:

How to Use ADX Indicator for Day Trading?

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