ADX Indicator - Colored for Amibroker (AFL)

kaiji

about 14 years ago

Amibroker (AFL)

Easily see rise or fall of the ADX with this colored ADX Line. The period default is 10 but easily adjusted using the parameter feature.

In order to evaluate the strength of the current trend, be it up or down. It’s important to determine whether the market is trending or trading (moving sideways), because certain indicators give more useful results depending on the market doing one or the other.

ADX is an oscillator that fluctuates between 0 and 100. Even though the scale is from 0 to 100, readings above 60 are relatively rare. Low readings, below 20, indicate a weak trend and high readings, above 40, indicate a strong trend. The indicator does not grade the trend as bullish or bearish, but merely assesses the strength of the current trend. A reading above 40 can indicate a strong downtrend as well as a strong uptrend.

ADX can also be used to identify potential changes in a market from trending to non-trending. When ADX begins to strengthen from below 20 and/or moves above 20, it is a sign that the trading range is ending and a trend could be developing.

By Tommy Beard

Indicator / Formula

//Trend Following Systems DO NOT work when ADX is Below 20 - Tech Analysis A-Z; page 120

P1 = Param("Period",10,0,100,1);

MyPDI= PDI(P1);//Positive Directional Indicator

MyMDI= MDI(P1);//Negative Directional Indicator (Minus)

MyADX= ADX(P1);//Average Directional Movement Index

//Green ADX Line=Rising; Red ADX Line=Falling

col = IIf( MyADX > Ref( MyADX, -1 ), colorGreen, colorRed );

Plot( MyPDI,"+DI",colorWhite, styleLine);

Plot( MyMDI,"-DI",colorBlue, styleLine);

Plot( MyADX,"ADX",col, styleLine);

Title=Name()+ " " + Date() + " Price: " + C + EncodeColor(colorIndigo) +"  ADX"
+ WriteVal( MyADX )+ EncodeColor(colorWhite) + "  +DMI" + WriteVal( MyPDI )+
EncodeColor(colorBlue) + "  -DMI" + WriteVal( MyMDI );

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