ADX (Average Directional Index)
The average directional index (ADX) is a technical analysis indicator used by some traders to determine the strength of a trend.
The trend can be either up or down, and this is shown by two accompanying indicators:
- Negative Directional Indicator (-DI)
- Positive Directional Indicator (+DI)
The price is moving up when +DI is above -DI
The price is moving down when -DI is above +DI.
Logic of the algorithm:
- Seeks for a given strength configured by the user
- Fires when PDI > MDI
- Pre-configured for the candle of 1h over 14 periods seeking for 'long' confirmation of strength 32
- For an additional confirmation, combine with a volume increase indicator.