Average Directional Movement Index Rating (ADXR)

Average Directional Movement Index Rating (ADXR) is a smoothed version of ADX indicator and is used as a rating of the Directional Movement while smoothing out ADX values.

 

If to compare ADXR to ADX, the smoother ADXR doesn't depend much on fast short-term market turns and reversals, which allows to minimize trading risks when relying on ADXR in the long term.

 

 

How to trade with ADXR

 

When ADXR is above 25 - use a trend-following system.
When ADXR drops below 20 - avoid using trend-following systems, instead use oscillator based systems for calm, non-trending or range-bound markets.

 

A rising ADXR, with DI+ above the D- indicates a strengthening bullish market.
A rising ADXR, with DI- above DI+ indicates a strengthening bearish market.

 

A cross of ADXR and ADX lines can also be used for evaluating changes in the market.

 

 

ADXR Formula

 

 

The smoothing nature of ADXR makes it less responsive than ADX.

ADXR is used for calculation of the Commodity Selection Index (CSI).


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Posted By dionnabown : 31 August, 2020
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