Description
The ADXR (Average Directional Movement Rating) is a technical indicator used in financial trading to measure trend strength and momentum. It is derived from the Average Directional Index (ADX) and is designed to smooth the ADX values over time. ADXR is calculated as the average of the current ADX value and the ADX value from a defined number of periods earlier. This smoothing makes ADXR less sensitive to short-term fluctuations and helps traders identify stable trend conditions. ADXR does not indicate direction (up or down) but shows the strength of a trend; higher values imply a stronger trend, while lower values suggest a weaker trend or range-bound market.
Features
Trend Strength Measurement
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Quantifies the strength of market trends without indicating direction.
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Helps distinguish between trending and non‑trending (sideways) conditions.
Smoothed Output
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Derived by averaging current ADX with a past ADX value, reducing noise.
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Provides a more stable indicator compared to raw ADX.
Compatibility with Directional Indicators
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Used alongside +DI and –DI to provide context about trend direction.
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Avoids false signals by confirming trend strength before entry.
Adjustable Parameters
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Lookback period can be customized to match trader’s timeframe and volatility preference.
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Longer periods yield smoother signals; shorter periods respond faster but can be noisier.