ADXR

Modified on 2008/04/13 14:57 by Administrator — Categorized as: Standard Indicators

Syntax

public static ADXR Series(WealthLab.Bars bars, int period)

Parameter Description

Bars	The Bars object
period	Indicator period

Description

ADXR stands for Average Directional Movement Index Rating, and is a component of the Directional Movement System developed by Welles Wilder. This system attempts to measure the strength of price movement in positive and negative directions, as well as the overall strength of the trend. The ADXR component is simply a special type of moving average (WilderMA) applied to the ADX indicator.

The ADXR can be used to determine if price movement is sufficiently directional to be worth trading. In other words, use the ADXR as a filter to trade with trend following tools.

Interpretation

ADXR is sometimes used as a signal line. A buy signal occurs when ADX crosses above ADXR, and a sell occurs when ADX crosses below ADXR.
Welles Wilder's rule is to use trend follow systems when ADXR is above 25 and when ADXR drops below 20 then do not use a trend following system.
ADXR behaves like an Averaged ADX. See ADX. The ADXR is a lagging indicator and will give signals after the ADX.
The ADXR can be used in place of the ADX in the Directional Movement system. It results in more conservative trading signals.

Calculation

ADXR = ( ADX(today) + ADX(n days ago) ) / 2

Example

using System;
using System.Collections.Generic;
using System.Text;
using System.Drawing;
using WealthLab;
using WealthLab.Indicators;

namespace WealthLab.Strategies
{
	public class MyStrategy : WealthScript
	{
		protected override void Execute()
		{
			// Flag ADX/ADXR CrossOvers
			for(int bar = 20; bar < Bars.Count; bar++)
			{
				if( CrossOver( bar, ADX.Series( Bars, 14 ), ADXR.Series( Bars, 14 ) ) )
					SetBackgroundColor( bar, Color.FromArgb(255, 227, 231) );
			}
		}
	}
}