Average Directional Index

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The Average Directional Index function was developed by J. Welles Wilder. It combines two other indicators, the Positive Directional Indicator and the Negative Directional Indicator, which were also developed by Wilder. Applications of ADX include indicating the strength of the current trend in stock price (but not the trend direction).

1. Syntax

Average Directional Index:

AVGDIRECT(d0,d1,d2,s0)

Positive Directional Indicator:

AVGDIRECTPOS(d0,d1,d2,s0)

Negative Directional Indicator:

AVGDIRECTNEG(d0,d1,d2,s0)

2. Input

The Average Directional Index functions require the following input series:

  • d0 - High data values - The first set of data values for which the Average Directional Index is calculated, usually the daily high price of a stock.
  • d1 - Low data values - The second set of data values for which the Average Directional Index is calculated, usually the daily low price of a stock.
  • d2 - Close data values - The third set of data values for which the Average Directional Index is calculated, usually the daily close price of a stock.

3. Parameters

The Average Directional Index function has the following parameters:

  • s0 - Period - The number of time periods to use in the calculation. Default value is 14.

4. Output

The AVGDIRECT function generates the following output:

  • Average Directional Index - The Average Directional Index result set. Values range between 0 and 100.

The AVGDIRECTPOS function generates the following output:

  • Positive Directional Indicator - The Positive Directional Indicator result set.

The AVGDIRECTNEG function generates the following output:

  • Negative Directional Indicator - The Negative Directional Indicator result set.

5. See also

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