Home                           

 Try Investor/RT             

 Investor/RT Tour           

 Getting Started              

 What's New                  

 Testimonials                 



MASTER INDEX
  SEARCH
  CHARTS
  MAIN TOOLBAR
  SETTING PREFERENCES
  TECHNICAL INDICATORS
 
WHAT'S NEW
  ALARMS
  BACKTESTING

  CONFIRMING TRADES
  CUSTOM COLUMNS
  CUSTOM INDICATORS
  CUSTOM INSTRUMENTS
  CUSTOM PRICES
  DATA FEEDS
  DATABASE
  DOWNLOADING DATA
  FEED STATUS
  HEARTBEAT
  HELP
  MULTI-LINKING
  MULTI-PERIODICITY
 
INSTRUMENT SETUP
 
NASDAQ LEVEL II
 
NEWS TICKER
 
NEWS BROWSER
  OPTIMIZATION
  OPTIONS ANALYTICS

  PLACING TRADES
  PORTFOLIOS
  PRESETS
 
PRINTING
  QUICK QUOTES
  QUOTE PAGES
  REALIZATION
  RTL LANGUAGE
  SCANS
  SCHEDULES

  SCOPE
  SYSTEM STATUS
  TICKER TAPE
  TIME AND SALES

 
TRADING NOTES
  USER VARIABLES
  VERTICAL SCALE
MASTER INDEX
DICTIONARY
FEEDBACK


Indicator-A-Day
 24. Volume Breakdown
 23. PriceTime Cycles
 22. Trend Intensity Index
 21.
Bollinger Bands
 20.
Balance of Power
 19. RSI
 18.
Fib Retracements
 17. Parabolic SAR
 16.
CCI
 15. ADXR
 14.
ADX
 13.
DI+ / DI-
 12.
True Range
 11.
Stochastics
 10. Statistics

   9. TLB Oscillator
   8. Weighted MA
   7. Exponential MA
   6. Moving Average
   5. Regression Review
   4. Reg Acceleration
   3. Regression Slope
   2. Regression Bands
   1. Linear Regression

 

Investor/RT Tour ( more on Technical Indicators )
ADX (Average Directional Movement)
The Formula . . . 

. . .more on Formulas 

ADXi = [(ADX(i-1) * (n - 1)) + DXi] / n
     where n = Smoothing Period
DX = [ 100 * ABS( (+DI) - (-DI) ) ] / ( (+DI) + (-DI) )

See Also: +DI DI- : Directional Indicator
See Also: TR : True Range
See Also: ADXR : Direction Movement Rating
 
The Presentation . . . 

. . . more on Charts 

ADX Chart

Above is a Daily Chart of Brooks Automation (BRKS).  The middle pane contains the ADX line (in blue) and the +DI (green) and -DI (red) lines.  The lower panes shows the Average True Range indicator in gray.  The upper pane has a Color Marker overlaying the price bars, showing where the ADX line turned down while above both the +DI and -DI lines.

 
The Preferences . . . 

. . . more on Preferences 

ADX Preferences

  • DX Period - Period used in computing the DX, and it's component +DI, and -DI values.

  • Smoothing Period - Used to apply a Welles Wilder Smoothing to the DX, which results in the ADX value

  • Line Color - Color and style of the ADX line in the chart

 
The Description . . .
Average Directional Movement is a momentum indicator developed by J. Welles Wilder. The ADX attempts to measure the extent to which a market is trending.  This indicator measures the strength of the trend, regardless of direction; the higher the value, the stronger the trend.

The ADX can be used in conjunction with the Direction Indicator (+DI, -DI) to produce an complete trading system.  This system consist of three rules:  the Crossover Rule, the Extreme Point Rule, and the Turning Point Rule.

The Crossover Rule
The Crossover Rule states to establish a long position whenever +DI crosses above -DI, and to establish a short position whenever -DI crosses above +DI.  In RTL, the bullish crossover would be accomplished with the following scans...

DIPLUS > DIMINUS AND DIPLUS.1 <= DIMINUS.1

...while the bearish crossover would be accomplished with this scan...

DIMINUS > DIPLUS AND DIMINUS.1 <= DIPLUS.1

The Extreme Point Rule
Identify a trigger point at the extreme price on the bar the lines cross. If it's a bullish crossing (+DI cross above -DI), you would wait for the price to rise above this extreme price (the high price on the day the lines crossed) on a subsequent bar. If it's a bearish crossing (+DI crosses below -DI), the extreme point is defined as the low price on the bar the lines cross.  You would then wait for price to break below this extreme price on a subsequent bar before entering into a short position.

The Turning Point Rule
The Turning Point rule first requires the ADX to be above both the DI lines (+DI and -DI). When the ADX turns lower while in this area, the market often reverses the current trend. This is a warning signal that the market is about to change direction.  This condition can be discovered with a scan using the following syntax...

ADX > DIPLUS AND ADX > DIMINUS AND ADX < ADX.1
AND ADX.1 >= ADX.2

According to the developer of this system, you should stop using any trend following system when the ADX is below both DI lines, as no discernable trend exists.
 

RTL Tokens . . . ADX ( more )

ADX can be accessed in the RTL language using the token ADX.
 

Keyboard Adjustment . . .
The DX Period and the Smoothing Period both can be adjusted directly from they keyboard without opening up the preference window.  First, select the indicator, then use the up and down arrow keys to adjust the DX Period up or down by 1.  To adjust the Smoothing Period, hold down the shift-key while hitting the up and down arrows on your keyboard.  For more information on technical indicator adjustment, click here.
 
User Strategies . . . 
If you have a User Strategy you'd like to share, please email to support@linnsoft.com  
      03/15/02
    
  Coming Soon . . .