ADX (Average Directional Index)

Indicator Description

ADX (Average Directional Index) is a technical indicator used to measure trend strength. It does not show the direction of the trend, but rather the strength of the trend.

Function Information

• Function Name: ADX
• Input Parameters:
  • High: High price
  • Low: Low price
  • Close: Closing price
• Parameter Settings:
  • timeperiod: Time period (default: 14)
• Output: ADX value

Calculation Principle

ADX calculation is based on the following steps:

1. Calculate +DM and -DM (Directional Movement)
2. Calculate +DI and -DI (Directional Indicators)
3. Calculate DX (Directional Index)
4. Calculate ADX as the smoothed average of DX

Usage Scenarios

1. Trend Strength Assessment
2. Trend Confirmation
3. Trading Signal Generation
4. Market State Analysis

Usage Recommendations

1. ADX > 25 indicates a strong trend
2. ADX < 20 indicates a weak trend
3. Use in conjunction with +DI and -DI
4. Pay attention to market environment changes