ADXm: Displaying Directional ADX Waves and a Trend Threshold
Summary
ADXm presents trend strength in a format intended to make directional movement easier to see than with a conventional ADX plot. It displays positive and negative ADX half-waves in different colors and shows the difference between the positive and negative directional indicators as a gray signal. The document says the indicator is used in the same general way as traditional ADX.
Dashed horizontal levels mark a threshold above which the market is treated as trending. The suggested threshold is approximately 20 to 25, with the appropriate setting depending somewhat on the timeframe. The indicator has settings for the ADX calculation period and the critical level. No chart examples, tests, or performance results are supplied, so the document explains the display and its intended interpretation without establishing that it improves trend identification or trading outcomes.
Key ideas
- ADXm separates positive and negative ADX half-waves to make directional movement more visible.
- It plots the difference between the positive and negative directional indicators as a separate signal.
- A dashed critical level indicates when the market is considered to be trending.
- The suggested threshold is approximately 20 to 25 and may vary with timeframe.
- The indicator's stated usage follows the traditional ADX approach, but no test evidence is provided.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.