Average Directional Index
How the Average Directional Index Indicator works. This tool yields signals by calculating the Plus Directional Indicator and the Minus Directional Indicator. Trend strength can be determined by observing:
- ADX rise which implies that market trend is getting stronger.
- ADX fall, which indicates that the trend is unstable.
- A buy signal if Plus Directional Indicator (+DI) or the green line goes above the Minus Directional Indicator (-DI) or the red line
- A sell signal if Minus Directional Indicator or red line goes above Positive Directional Indicator or green line.
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