Random article: Average Directional Index
Average Directional Index , ADX represents part of the system of Directional Movement Index and is based on filtration pursuant to paces of price change. It was first time introduced by J. Welles Wilder in 1978 in "New Concepts in Technical Trading Systems" book. ADX figures should be of immediate interest when its value is above 20 - 22. When ADX is reversed from top to bottom, current tendency loses its intensity and probability of correctional movement or reversal grows. Therefore, when ADX enters zone of extreme values, it is important to trace a probable change of trend's direction.