• Home
  • Courses
    • NSE Academy Certified Courses
      • Capital Market Analytics
      • Certified Program on Intraday Trading Strategies
      • Advanced Technical Analysis
      • Advanced Options
      • Advanced Algo Trading
      • Advanced Fundamental Analysis
      • Advanced Risk Management
      • Algorithmic Trading & Computational Finance using Python & R
    • TC Courses
      • FSM 1.0
      • FSM 2.0
      • Mentorship Program
  • Learning Center
    • Financial Education
    • IPO Issues
    • Fundamental Analysis
    • Technical Corner
    • Options Corner
    • Risk Management
  • Screener
  • Emerging Leaders
  • Terminal
  • Subscribe
Have any question?
7718989954
info@tradingcampus.in
Login
Trading CampusTrading Campus
  • Home
  • Courses
    • NSE Academy Certified Courses
      • Capital Market Analytics
      • Certified Program on Intraday Trading Strategies
      • Advanced Technical Analysis
      • Advanced Options
      • Advanced Algo Trading
      • Advanced Fundamental Analysis
      • Advanced Risk Management
      • Algorithmic Trading & Computational Finance using Python & R
    • TC Courses
      • FSM 1.0
      • FSM 2.0
      • Mentorship Program
  • Learning Center
    • Financial Education
    • IPO Issues
    • Fundamental Analysis
    • Technical Corner
    • Options Corner
    • Risk Management
  • Screener
  • Emerging Leaders
  • Terminal
  • Subscribe

Basics of Python

  • Home
  • Blog
  • Basics of Python
  • Average Directional Index (ADX) Indicator

Average Directional Index (ADX) Indicator

  • Posted by Abhilash Bandari
  • Date November 21, 2020
  • The Average Directional Index is a technical indicator used to analyse the stock market.
  • The ADX indicator is used to assess the strength of the trend. However it is used in conjunction with two other lines +DI (positive directional indicator) and -DI (negative directional indicator) which decide the direction of the trend.
  • Traders can use these lines together and decide whether to enter the trade or not. Also if they enter the trade, whether to go short or long in the rally.

Few formulae for ADX indicator:

Generally, the number of smoothing periods considered are 14, i.e., n = 14

 

  • The ADX indicates a strong trend when the value is above 25 and it indicates a weak trend when the value is below 20.
  • The trend direction can be identified from the crossovers between +DI and -DI.
  • If +DI crosses above -DI and if the ADX value is above 25, it indicates a strong buy signal and traders can go long in the rally.
  • Few traders who already went short in the rally can initiate their short coverings.

 

  • Similarly, if the -DI crosses above the +DI and if the ADX value is above 25, it indicates a strong sell signal and traders can go short in the rally.
  • Few traders who already went long in the rally can initiate their long unwinding.
  • Traders should never enter the trade when the ADX value is below 20 because it indicates a weak strength and the price is trendless.

 

  • The main disadvantage of the ADX indicator is that crossovers occur frequently. They can act as false signals especially when the ADX value is below 25 and it puts the traders in a dilemma whether to go long or short in the rally.

This is the 1 day chart of Tata Steel Ltd (NSE) around Nov, 2019 to Aug, 2020.

ADX – violet line, +DI – green line, -DI – red line

  • Share:
author avatar
Abhilash Bandari

Previous post

Andrew Pitchfork Indicator
November 21, 2020

Next post

Volume Price Trend Indicator
November 23, 2020

You may also like

Arithmetic Operators
12 May, 2021

There are around 7 arithmetic operators available in python. These are called as binary operators because they act on two operators. a = 13, b = 5 Operator Meaning Example …

Operators in Python
11 May, 2021

An operator is a symbol that performs an operation. Some examples of operations are addition, subtraction, multiplication etc. a + b is an operation where a,b are operands and ‘+’ …

Bear Call Spread
23 December, 2020

Bear call spread is an option strategy used by traders to cap their maximum loss. At first, a trader is bearish with the downside capped, so he initiates a sell …

emerging leader

  • Basics of Python
  • Emerging Leaders
  • Financial Education
  • Fundamental Analysis
  • Investment Ideas
  • IPO Issues
  • Nifty 50
  • Options Corner
  • Risk Management
  • Technical Corner
  • Uncategorized

Past Batches

December 2018 – Completed

March 2019 – Completed

July 2019 – Completed

November 2019 – Completed

January  2020 – Running

Get Updates

Subscribe to our mailing list and get learning stuff and updates to your email inbox
Loading

Accordions

Company Summary

Bajaj Electricals Limited is engaged in engineering and projects; power distribution, illumination and consumer durables businesses.

It has a range of domestic and kitchen appliances comprising water heaters, room heaters, coolers, irons, mixers, induction cookers, toasters, kettles, microwave, rice cookers, gas stoves, non-electrical kitchen aids and pressure cookers.

It offers ceiling, table, pedestal, wall, fresh air and industrial fans, and lighting solutions, such as light sources, light emitting diode-based lighting products, domestic luminaires, torches and lanterns.

Key Highlights of Company Business

Segments and Products

The Company's business segments consist of

  1. Lighting;
  2. Consumer Durables;
  3. Engineering & Projects,

The Lighting segment includes lamps, tubes and luminaries.

The Consumer Durables segment includes appliances and fans.

The Engineering & Projects segment includes transmission line towers, telecommunications towers, highmast, poles and special projects.

The Others segment includes diecasting and wind energy.

Financial Performance

Financial Ratios

Trading Campus

7718989954

info@tradingcampus.in

Company

  • About Us
  • Gallery
  • Team
  • Contact Us
  • Careers

Courses

  • Technical Analysis
  • Algo Trading
  • Options
  • Fundamental Analysis
  • Risk Management
  • Algo Trading using Python

Support

  • Learning Center
  • Forum
  • Login
  • Videos

Education WordPress Theme by ThimPress. Powered by WordPress.

Copyright © 2018 Trading Campus. All rights reserved.