Click here to Login








ADX Composite Indicator for the Stock Market

by Brian Brown, 2636 days ago
Share |


From a tool that allows me to measure the trend strength of a stock, I wanted to measure the trend strength of the global stock market by creating a composite that averages the trend strength values of all stocks that are included in the U.S. Stock Market. Note that this composite can be applied to any market.

For the trend strength measure I have used the average directional index (ADX) because it is a very popular technical analysis and it provides a very good measure of the trend strength of a security. The ADX is calculated based on the moving average of the price range expansion using a specific lookback period.

To calculate this market composite indicator, I have used a 14-bar period with the Average directional index. The ADX indicator fluctuates between 0 and 100 and therefore the composite indicator that is based on the ADX will also fluctuate between these same levels.

A high value indicates that the average trend strength of the stocks you are analyzing is high and this means that there are more stocks with strength trends than stocks with weak trends. This signal can be interpreted differently by traders. Some will think that this is a bullish/bearish signal and that the overall trend will continue (whether it is up or down trend) and some will believe that that above a certain threshold the trend is likely to revert.

Note that this market composite indicator doesn't provide bullish or bearish signals for the market. It is used to measure the trend strength of the entire stock market.




You have to log in to bookmark this object
What is this?




Type: Composite Index

Object ID: 662


Country:
All

Market: Stock Market

Style:
Technical Analysis

Reviews
You must log in first

Join now
and get instant access for free to the trading software, the Sharing server and the Social network website.
Click here


Related objects

Empty

Number of reviews
Click to add a review
Average rate
Click to rate this item
Number of times this object was downloaded
Number of rates the current object received
Report an object
if you can't run it for example or if it contains errors
Click to report this object

Technical Analysis


Fundamental Analysis



Random Blog Posts

How to create market indicators using the composite function - Part 3

How to create market indicators using the composite function - Part 2

Create a Pivot Table that displays the Relative Strength Index - RSI

6 Stock Trading Items Related to the New York Stock Exchange - NYSE

Pivot Tables in QuantShare Trading Software

How to create market indicators using the composite function - Part 1

Optimize a trading strategy using the Sharpe ratio

How to create a trading indicator that uses stock news

Show All

Number of reviews
Click to add a review
Average rate
Click to rate this item
Number of times this object was downloaded
Number of rates the current object received
Report an object
if you can't run it for example or if it contains errors
Click to report this object






QuantShare
Product
QuantShare
Features
Create an account
Affiliate Program
Support
Contact Us
Trading Forum
How-to Lessons
Manual
Company
About Us
Privacy
Terms of Use

Copyright 2017 QuantShare.com
Social Media
Follow us on Facebook
Twitter Follow us on Twitter
Google+
Follow us on Google+
RSS Trading Items



Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.