OPEN-SOURCE SCRIPT

ADX Trend Confirmer [Honestcowboy]

The ADX Trend Confirmer aims to give traders or algorithms a way to confirm a trend before entering a trade.

While the default for ADX is a smoothing factor of 14 and a length of 14 to measure directional strength. In my experience this is a lagging indicator and not the best for confirming if the market is trending.

🟢 What are the methods used for confirming trend in this indicator?

  • ADX above x number : By default we use an ADX length of 3 and it's value needs to be above 50.
  • ADX sloping up ? This will check if the ADX value is higher than that of previous bar, this to confirm that trend is getting momentum and not slowing down.
  • close>open / close<open : This is to check in which direction the trend is going.
  • Mid Point : We use a mid-point between highest high and lowest low in a given period by default of 3 bars. Price needs to close above/below this point to confirm direction. We use previous bar mid-point so there is no repainting of the line.
  • Min bar ratio: How many percent of the bar is the body? A high amount of wicks but not a lot of body can mean indecision (no trend). This to ensure entries are only after a convincing bar.


🟢 Extra Info:

Thanks to ZenAndTheArtOfTrading for publishing ZenLibrary which we use in this script.

This is not a strategy on it's own but a building block to add to your analysis.
Average Directional Index (ADX)Candlestick analysisTrend Analysis

Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.

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