Investing & Trading

ADX Crossover Study

By Samantha Baltodano


TL;DR:

The ADX Crossover study finds where the ADX value crosses a specified level. When used alongside +DI and -DI crossover trade signals, a signal is only triggered when the ADX is also above the specified value.


What Is the ADX Crossover Study?

The ADX Crossover study finds where the Average Directional Index (ADX) crosses a specified level. Values of ADX greater than this level are supposed to signify a strong trend (in either direction). Values of ADX lower than this level indicate a weak trend.


The ADX line is used in combination with the +DI and -DI lines to generate trade signals. A trade is signaled when the +DI and -DI lines crossover each other, but only when the ADX is also above the specified level. 


ADX values of 20 or 25 are commonly used. 


Summary

  • Values of ADX over a specified level indicate a strong trend. Values of ADX under a specified level indicates a weak trend or no trend at all.
  • The value of ADX is often set at 20 or 25.
  • When used alongside +DI and -DI crossover trade signals, a signal is only triggered when the ADX is also above the specified value.


ADX Crossover Study is just one of many studies that Archaide automates. For a full list of strategies and studies available click here.


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