ADX

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  (aka 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 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 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 Average Directional Index allows for setting the DM and ADX periods independently. It is therefore possible to adapt the ADX indicator to Dr. Charles Schaap’s version. In order to do so, the DM period is set to 13 and the ADX period to 8.

The indicator is available for NinjaTrader 8 and the Indicator Library also features the ADXR, ADXVMA and the ADXVMA Plus.