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1997issue C091-2

An ADX threshold and a moving average as a trend filter

A combination overlay can plot a 50-bar moving average of a chosen price series and alert when a 14-period Average Directional Index falls below 15. A companion screen reports signed days since the last 50-day cross and signed distance from that average, and a mechanical trend filter can require both side-of-average location and an Average Directional Index greater than 15.

  • A combination overlay can plot a 50-bar moving average of a chosen price series and raise visual and audio alerts when a 14-period Average Directional Index falls below 15.
  • A screen can count signed sessions since the close last crossed a 50-day average and state signed distance from that average as a percentage of the largest distance observed since the last cross.
  • An Average Directional Index below 15 can be treated as low directional movement, while a mechanical trend filter can require both a close on the matching side of a 50-period average and an Average Directional Index greater than 15 before labeling a condition as trend-aligned.
  • A triangle-style compression check can compare the last two peaks and last two valleys on a 5% zigzag of highs and lows, then be reviewed against the Average Directional Index and 50-day average statistics.
Entries in this reading3 entries
Current trackAverage Directional Index71 readingsTrend filter137 readingsMoving average449 readings

A slow average and an ADX cutoff

The historical workflow pairs a moving average used as a 50-bar or 50-day price baseline with an Average Directional Index used as a 14-period directional-movement reading compared with a stated low-level threshold. The moving average is used for side-of-market location, days since the last cross, and distance from the close. The Average Directional Index is then used to tell quiet directional movement from a more established reading.

The overlay and the companion pane

A combination overlay can plot a 50-bar moving average of a chosen price series and raise visual and audio alerts when a 14-period Average Directional Index falls below a level of 15. A companion Average Directional Index pane can show the 14-period reading as a histogram against a horizontal line at 15 and alert when that reading is below the line.

S&P 500 daily ADX and the 15 cutoff

The 14-period Average Directional Index on this daily S&P 500 sample stays above the article's 15 cutoff through most of the later advance and only slips under that line in the quieter stretches, which is when the overlay would mark the average. Heights were read from the histogram pane of the published TradeStation figure; the flat series is the Level(15) input stated in the tip.
The 14-period Average Directional Index on this daily S&P 500 sample stays above the article's 15 cutoff through most of the later advance and only slips under that line in the quieter stretches, which is when the overlay would mark the average. Heights were read from the histogram pane of the published TradeStation figure; the flat series is the Level(15) input stated in the tip.S&P 500 Index · Daily

The tip does not print an ADX table, so each height is an approximate visual reading to the nearest index point. The 50-bar average sits in the price pane of the same figure and cannot share this axis.

Days since the last cross and distance from the average

A screen can count sessions since the close last crossed a 50-day average, using a negative sign when the close is below the average and a positive sign when it is above. The same screen can state how far the close sits from the 50-day average as a percentage of the largest distance observed since that last cross, again signed by whether price is above or below the average.

A shrinking magnitude of that percentage reading can be read as the close approaching the average. A larger magnitude in the days-since-cross column can be read as a longer-running alignment.

Quiet directional movement and a mechanical trend filter

An Average Directional Index reading below 15 can be treated as a low-directional-movement condition when judging whether a developing chart formation is occurring in a quiet trend environment. A mechanical trend filter can require both a close on the matching side of a 50-period average and an Average Directional Index greater than 15 before labeling an upside or downside condition as trend-aligned. That trend filter combines the average’s location of price with an Average Directional Index test for quiet versus established directional movement.

A triangle-style compression check

A triangle-style compression check can compare the last two peaks and last two valleys on a 5% zigzag of highs and lows, then be reviewed against the Average Directional Index and 50-day average statistics. Editorial: the compression check is a formation review, not a substitute for the average’s location of the close or for the Average Directional Index test of whether directional movement is quiet or established.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
15 of 56 in the Average Directional Index track
19981-8 pp.Next on Average Directional IndexRegime filters for mutated indicatorsIndicator and system inputs can lose or gain timing value when market structure changes. That shift in usefulness is variable mutation.
All readings on this track · 56 readings
  1. 1986Cycle-aligned directional trend indicator
  2. 1987What crossover and directional entry rules actually compare
  3. 1988A directional-line cross needs a trend filter, an extreme-point rule, and a dollar stop
  4. 1988Constructing true range by offset addressing
  5. 1988Constructing directional movement from bar range
  6. 1988Average directional index construction: recursive smoothing and lookback offset
  7. 1988Staged Average Directional Index construction with Relative Strength Index confirmation and stop alerts
  8. 1988Average Directional Index construction with frozen true range and directional rules
  9. 1991Constructing the average directional index from range expansion and true range
  10. 1991Constructing five-session forecasts from stochastic, ADX, and MACD inputs
  11. 1993Constructing the average directional index from directional movement and true range
  12. 1993Confirming n-bar breakouts with ADX and DX filters
  13. 1994Constructing a Bollinger band-width trend filter
  14. 1994A pre-trade checklist that can refuse a long three ways
  15. 1997An ADX threshold and a moving average as a trend filter
  16. 1998Regime filters for mutated indicators
  17. 1999Building the average directional index from range extension and true range
  18. 2000Evaluating ADX, RSI, and moving averages in a multi-stock warehouse
  19. 2000Stochastic pop as a filtered continuation setup
  20. 2000Onset and exit from one average directional index
  21. 2002Joint ADX and MACD readout for trend strength and direction
  22. 2003Adaptive Donchian breakout with implied volatility and volume
  23. 2004The average directional index as a regime gate for the relative strength index and the stochastic oscillator
  24. 2004Constructing true-range-specified volume as a directional filter
  25. 2005Constructing a multi-filter penny stock breakout procedure
  26. 2005Construct one playbook that flips with session regime
  27. 2005Combining Bollinger Bands, the average directional index, and Fibonacci retracement on currency pairs
  28. 2006Assembling an adaptive price zone from double-smoothed averages
  29. 2006An ADX strength gate for MACD and the stochastic oscillator
  30. 2007Directional movement as a filter plus trigger
  31. 2007Constructing a veto-first trend permission stack
  32. 2007ADX gates for trend end, range, and reversal
  33. 2008Constructing a nine-cell directional-ratio grid
  34. 2008Average directional index and directional trend indicator lookbacks as trend-filter parameters
  35. 2008A holding-matched market lens from averages and directional-line crosses
  36. 2008A nine-cell directional scoreboard for multi-horizon entries
  37. 2010Building a Vortex Indicator from high-low distances
  38. 2010Constructing ADX, RSI, and MACD price filters
  39. 2011Constructing a volume zone oscillator with a moving-average and Average Directional Index regime filter
  40. 2011A volume zone oscillator conditioned by an Average Directional Index filter
  41. 2011Candlestick names need volume-price, ADX, and moving-average checks
  42. 2012Clustered average-directional-index traces as a trend-start filter
  43. 2012Average Directional Index cluster filters for trend-start signals
  44. 2012Confirming a trend start or turn with a triple ADX cluster
  45. 2013Constructing a late-entry stack from a signed DMI oscillator
  46. 2013A directional oscillator and its stochastic as a stacked timing filter
  47. 2013ADX cluster lookbacks are a locked specification, not a chart label
  48. 2013Combining moving averages, stochastics, and ADX in a daily scan
  49. 2015Assembling the Average Directional Index from directional movement
  50. 2016How an Average Directional Index filter and a breakout entry form one procedure
  51. 2016Score RSI and stochastic crossings only when ADX confirms the trend
  52. 2018Constructing an ADX filter for intraday breakouts
  53. 2018An ADX volatility gate for prior-day breakouts
  54. 2019Exponential deviation bands with a moving average, RSI and ADX
  55. 2020A normalized-slope trend filter from linear regression
  56. 2020Gating volatility-momentum divergences with a Trend filter
By fieldIndicators and filters682 readingsBy year199756 readings
All 71 readings tagged Average Directional Index
Also on Average Directional Index5 readings
1993Confirming n-bar breakouts with ADX and DX filters1994Constructing a Bollinger band-width trend filter1998Regime filters for mutated indicators2007Constructing a veto-first trend permission stack2008Average directional index and directional trend indicator lookbacks as trend-filter parameters