ADX Differential Indicator

Summary

ADX Differential Indicator uses the ADX indicator to find periods where there is not a direction and it looks for breakouts from the previous range.

The ADX indicator gives a window into the strength of the current trend. The strength determines if there an actual trend and it gives some indication as to how long that trend may last. The ADX does not give any indication if the trend is up or down. The most important piece of information given by the ADX is the direction in which the indicator is moving, the value of the ADX is unimportant.

Screen Shots

Usage

This indicator will take the important information that the ADX provides from the current bar to the last bar and give a sense of trending. When the value is increasing it means a stronger trend.

To define directionless markets the ADX Differential Strategy is used with an intra-day lower time compressions, meaning fifteen minute bars or smaller. Daily charts will work; however, with larger intra-day time frames the gap from open to close will cause unexpected results.

To smooth the line a four bar average of the differential is used.

Downloads

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