The ADX indicator supplied with NinjaTrader cannot be used with an input series other than price. We have recoded it so that you may apply it to other indicators. To do so, simply select any of the other NinjaTrader indicators as input series.
Indicator Description
The Average Directional Index, ( the ADX indicator ) was developed by J. Welles Wilder and tells us the strength of a trend. The calculation is based on a moving average of the price range expansion over a specific time period.
Specifically, the ADX indicator plots as a single line with values ranging from 0 to 100. The indicator is non-directional, and simply registers the trend strength, irrespective of whether price is trending up or down.
According to Wilder, strong trends are characterized by ADX indicator values above 25. There is no trend when the indicator show values below 20. Furthermore, when the indicator is sloping down from high values, it may indicate that the trend is coming to an end. Trend following systems may be less appropriate such scenarios. However, if the ADX has been below the 20 level for some time, and then suddenly jump above the that level, it may be used to trigger such systems.
Our version of the ADX indicator allows for setting the DM and ADX periods independently. It is therefore possible to adapt it to Dr. Charles Schaap’s version. In order to do so, the DM period is set to 13 and the ADX period to 8.
Other Library indicators
The ADX indicator is best used in combination with additional tools for technical analysis such as momentum oscillators, support / resistance and volume indicators. Specifically, you may review the Acceleration Deceleration, Fast Stochastics, the LBR 3/10 Oscillator or the TDI. The Indicator Spotlight newsletter has reviewed the TDI indicator.
For support / resistance levels you may have a look our Session Tools and Fibonacci lines, such as the Pivots Daily, Pivots Weekly, Pivots Monthly, Pivots N Monthly, Camarilla Pivots Daily, Camarilla Pivots Weekly, Camarilla Pivots Monthly, Camarilla Pivots N Monthly, Prior Day Fib Lines / Current Day Fib Lines, Prior Week Fib Lines / Current Week Fib Lines, the Current Month Fib Lines / Prior Month Fib Lines or the Current N Month Fib Lines / Prior N Month Fib Lines. Our Indicator Spotlight newsletter previously reviewed the Daily Pivot Levels and Fibonacci Retracement levels.
You may also check out our tools for Range and Volume Analysis, i.e. relative range / relative volume analysis. Finally, one may consider the Heinkin Ashi indicator, Daily Regression Channel, Moving Average Wave or the SuperTrend as ways for determining the trend. More information available in the Indicator Spotlights on the ADXVMA, Heikin Ashi and the Regression Chanel. Finally, the Indicator Library also has the ADXVMA Plus, in addition to the ADXR.
The ADX indicator is available for NinjaTrader 8.
