The Average Directional indicator (or ADX) is a directional trading indicator that is used to identify a technical trend, in this case of the Polkadot. The trend that is being identified, can be both a positive trend as a negative trend in the pricedevelopment of Polkadot.
The ADX was primarily developed for commodities, however it is also in use for stock and currency technical analysis, as well as for Polkadot. In this continuously updated article, we will explain the meaning and current trend of Polkadot. The current ADX analysis is based on the historical prices of Polkadot until January 18th, 2022.
In the chart below, the strength the trend is drawn, as well as the positive and negative directional indicators. The ADX (Average Directional Index) is the black line. The positive directional indicator (+DI) is the green line, and the negative directional indicator (-DI) is drawn in red.
In the chart above, the development of the price for Polkadot is shown for the period from 07/18/2021 until 01/18/2022. This same timeframe has been used in the average directional indicator chart below.
In the charts above, you can see the trends of the ADX, +DI and -DI. The current values of these three indicators for the Polkadot are listed in the table below.
|Polkadot average directional index||12.95|
|Polkadot positive directional indicator||37.22|
|Polkadot negative directional indicator||43.76|
Several signals can be gained from the chart above. First of all, the green line gives us an indication of the positive trend. The opposite line, the red one, indicates the negative trend for Polkadot.
When the green line tops the red line, the Polkadot is in a positive trend. However, when the situation turns around, the trend has also changed to a negative trend for Polkadot.
Furthermore, the black line gives the strength of the current trend of Polkadot, both positive and negative. The higher the black line (ADX), the stronger the trend.
Polkadot ADX score
The Average Directional Index (ADX) is used to measure the strength or weakness of a trend, not the actual direction. In general, when the positive directional indicator is higher than the negative directional in indicator, the trend of Polkadot is assumed to be positive. An important signal is when the -DI (red line) and +DI (green line) crosses over.
The Polkadot currently follows a negative trend. For Polkadot, the positive directional indicator is 37.22. The value for the negative directional indicator is higher (43.76). This means that the current trend of the Polkadot is negative.
To measure the strength of the current trend, we look at the ADX. The value of the ADX for Polkadot is 12.95, meaning that the trend is very weak. The ADX for Polkadot does not give us a good indication to start buying or selling Polkadot.
To get a good signal to trade Polkadot, we have to wait until the trend gives us a higher ADX value in the current negative trend.