Velez Vaylder developed a secondary focus of Indicator (ADX), to evaluate the effect of this trend, either ascending or descending trend. It is important to determine whether the market trend or a sideways trading range, because, according to this, can be any indicator, some of which are more effective with trend, the other with a lateral trade.
The index is an average orientation of oscillators, which ranges between 0 and 100. Even with that change the scale from 0 to 100, values above 60 are relatively rare. Values below 20 indicate a weak trend, while values above 40 in a strong trend. The indicator does not determine the direction of the trend as byche or Medvezhye, but merely assesses the force of the current trend. Value above 40 may indicate both a strong down trend, and on a strong upward trend.
The index of the average orientation can also be used to determine the potential transition from the trend of the market to trade sideways range. When the index of the average orientation is beginning to grow in the values below 20 and moves above 20, it indicates that trade in the side band ends, and can begin the development trend.
When ADX begins to weaken in the values of above 40 and moves below 40, it shows that the current trend is beginning to lose force, and trade can move in a lateral range.
The index of the average thrust is obtained from two other indicators, also developed by Vélez Vaylderom - this is a positive indicator of the direction (sometimes referred to as the + DI) and a negative indicator of the direction (referred to as the-DI).
For more information on the average orientation of LEDs can be found in Vélez Vayldera "New concepts in technical trading systems." Indicators Vayldera remains one of the best and most popular indicators for today.
Arthur Hill
stockcharts.com
stockcharts.com
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