The ADXR (Average Directional Index Rate) is an indicator used in technical analysis to measure the strength of a trend over a specified period. It is derived from the Average Directional Index (ADX) and provides a smoothed measure of the ADX.
Definition and Purpose
The ADXR is calculated by taking the average of the current ADX value and the ADX value from a selected number of periods ago. This smoothing process helps to reduce the volatility of the ADX indicator itself, making it easier to identify trends.
Syntax
// Calculation of ADXR
ADXR = (ADX + ADX[N]) / 2
Example
Here is a simple example of how to calculate and use the ADXR in ProBuilder language:
period = 14
myIndicator = ADXR[period]
mySignal = average(myIndicator)[period/2]
RETURN myIndicator coloured(225,27,195) AS "ADXR", mySignal AS "laggy ADXR"
In this example, period is set to 14, which is a common setting for ADX-based calculations. The myIndicator variable calculates the ADXR for the given period, and mySignal calculates a moving average of the ADXR, providing a secondary line to analyze for trend strength and potential crossovers.
Additional Information
- The ADXR is particularly useful in confirming the presence of a trend. A rising ADXR indicates an increasing trend strength, whereas a falling ADXR suggests a weakening trend.
- The indicator does not indicate the direction of the trend, only its strength. Direction must be assessed using other means such as the Directional Movement Indicators (+DI and -DI).
- Typically, ADXR values above 25 indicate a strong trend, while values below 20 suggest a weak or absent trend.
This indicator is best used in conjunction with other analysis tools to confirm trend directions and strength, providing a more comprehensive view of market conditions.