SM ADX

SM ADX is a Smoothed Average Directional Movement Index client side VTL Indicator. It is calculated by taking the ADX of each bar and then smoothing the ADX with T3 smoothing. T3 smoothing is a digital signal processing algorithm, it captures the trend with minimal lag. Thus SM ADX is smoother than the normal ADX indicator, eliminating the whipsaw moves in the ADX indicator.

SM ADX indicator consist the Average Directional Index (ADX), Minus Directional Index (-DI) and Plus Directional Index (+DI). These represent a group of directional movement indicators that form a trading system. ADX (light green line) measures trend strength without regard to trend direction. The other two indicators, +DI (yellow green line) and -DI (wheat color line) complement the ADX by defining trend direction. Used together, chartists can determine both the direction and strength of the trend.

In general, the bulls have the edge when +DI is greater than – DI, while the bears have the edge when – DI is greater. Crosses of these directional indicators can be combined with ADX for a complete trading system. SM ADX reading above 10 is considered as a strong trend. When plus DI cross above minus DI and SM ADX is above 10, buy position can be opened. For a sell signal, minus DI rise above plus DI and SM ADX is above 10. The SM ADX indicator eliminates many whip saw trades triggered by the normal ADX indicator.

The indicator parameters are SM ADX period, t3 smoothing period and smoothing factor. Parameter values are changed in the VTL editor. They are properly commented for ease of use.

Usage

• Download the attachment from vStore or directly from the vStore tab in your terminal by performing a right click on it and selecting Download & Install
• Copy it to your company VertexFX Local VTL Files folder i.e. C:ProgramDataVertexFX Client Terminals”Company name”VTL10Local VTL Scripts
• Restart your Client Terminal or Right Click on “Local VTL Scripts” Tree Node to find the script.