Description

• Average Directional Movement Rating (ADXR) is smoothened ADX
• It involves current value of ADX and ADX value certain period (bar) ago
• Average of (the current value and a value n period back) makes ADXR little less responsive and sensitive
• It helps to filter out excessive very fast moving tops and bottoms

Interpretation

• Declining ADXR below 20 shows that the stock is losing direction, a weak trend
• Rising ADXR above 40 shows that the stock is accelerating, strong trend
• Basic interpretation of ADXR is similar to ADX as it is simply average of two values of ADX

Default Parameters Used/Inputs

• High Line
• Low Line
• Close Line
• Period

Returns/Output

ADXR value of the stock based on parameters

Formula

ADXR=ADX₍₀₎+ADX_(-n)/2
where,
ADX (0) = Current value of ADX (Avg Directional Index)
ADX (-n) = ADX Value N bars ago