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Why is the normal ADX made unsigned and what happens if the sign is kept? If you are interested in this question, then here is a sign that answers it and allows you to trade more efficiently.

The index calculates ADX using standard formulas, but excludes the operation of carrying the module from the ADX values, which for some reason is artificially added to ADX. in other words, the indicator retains the initial sign of the ADX values, making them more accurate, easier to use, and sooner than the standard ADX. Strictly speaking, any transformation like taking a module destroys some of the information, and therefore it makes sense to exclude it. In addition, the indicator introduces additional buffers for ease of use.

The indicator displays 4 lines:

  • directly ADXS – a thick light blue line;
  • (- DI) negative movement index-dash-dashed light brown line (always positive);
  • – ( DI) inverted positive movement index-dash-dashed light green line (always negative);
  • ( DI)-(- DI) the difference between the two indexes is a thick gray line.

While traditional ADX is always positive, ADXS can be both positive and negative. ADXS signals are similar to ADX signals, but more understandable:

  • When ADXS rises (whether above or below 0), there is an upward trend. When ADXS declines (whether above or below 0), there is a downward trend.
  • The moment when a position should be opened in the direction of the trend is determined by the fact that the index difference crosses zero in the corresponding direction. Usually, according to the ADX rules, you buy when DI goes above -DI, and sell when DI goes below -DI, but ADXS provides a single convenient buffer for this – 4th: when it is > 0, buy when < 0, sale.
  • It is also easy to see that the (-DI) and -( DI) lines form a channel that gives additional confirmation signals – for example, when the difference goes beyond the channel, the signal is amplified compared to the intersection of 0; this can be used for “topping up”.

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The screenshots show how ADXS behaves in comparison with the usual ADX. It is easy to see that ADXS signals are formed earlier than ADX signals. At the points where the vertical lines are set, ADXS has already “decided” on a new trend and sends a signal, and ADX still shows a decrease, so it is still too early to enter according to it.

The parameters are the ADX period (default-14), and the price type (default – close).


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