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traderEd
Number of messages : 42
Points : 1201
Date of Entry : 2015-05-08
Year : 38

SM ADX - VertexFX Indicator

on Thu Apr 28, 2016 7:17 am
SM ADX indicator uses T3 adaptive smoothing in ADX calculations. This makes the Average Directional Index, ADX, more responsive to price. The SM ADX indicator consist the Average Directional Index (ADX), Minus Directional Index (-DI) and Plus Directional Index (+DI). These represent a group of directional movement indicators that form a trading system. ADX (light green line) measures trend strength without regard to trend direction. The other two indicators, +DI (yellow green line) and -DI (wheat color line) complement the ADX by defining trend direction. Used together, chartists can determine both the direction and strength of the trend.
In general, the bulls have the edge when +DI is greater than - DI, while the bears have the edge when - DI is greater. Crosses of these directional indicators can be combined with ADX for a complete trading system. SM ADX reading above 10 is considered as a strong trend. When plus DI cross above minus DI and ADX is above 10, buy position can be opened. For a sell signal, minus DI rise above plus DI and ADX is above 10. The SM ADX indicator eliminates many whip saw trades triggered by the normal ADX indicator.
The indicator parameters are ADX period, t3 smoothing period and smoothing factor. Parameter values are changed in the VTL editor. They are properly commented for ease of use.
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