The indicator presents a new way of early trend detection using the popular ADX indicator methods. The new system adapts to the market and eliminates additional conditions.
To generate a signal when using the standard ADX indicator, the ADX line should cross some level - 20, 22, 26, etc. However, it is very difficult to select such a level not only for different symbols but also for different timeframes on the same chart which makes ADX practically useless.
The solution has turned out to be simple but conceptual. The new indicator has no such level at all. A new line is calculated for defining a trend. If it crosses +DI upwards, a sell signal is generated; if it crosses -DI upwards, a buy signal is generated. A reverse crossing means an end of a trend.
The signal line has a parameter of sensitivity. The higher the value, the higher the noise filter on high-volatility instruments. The lower the value, the more accurate the signal. The recommended values are 5-10 (the default value is 6).
The new indicator also provides an ability to display data from any standard timeframe.
- Timeframe of ADX (0 - current) - timeframe used for the indicator calculation
- ADX period - ADX indicator period
- Applied price (close, open, etc.) - price type used for calculations
- Sensitivity of signal line - signal line sensitivity (the most optimal values are 5-10)
- Averaging method - signal line averaging method