The Average Directional indicator (or ADX) is a directional trading indicator that is used to identify a technical trend, in this case of the Litecoin. The trend that is being identified, can be both a positive trend as a negative trend in the pricedevelopment of Litecoin.
The ADX was primarily developed for commodities, however it is also in use for stock and currency technical analysis, as well as for Litecoin. In this continuously updated article, we will explain the meaning and current trend of Litecoin. The current ADX analysis is based on the historical prices of Litecoin until June 28th, 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 Litecoin is shown for the period from 12/28/2021 until 06/28/2022. 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 Litecoin are listed in the table below.
|Litecoin average directional index||19.09|
|Litecoin positive directional indicator||47.20|
|Litecoin negative directional indicator||51.34|
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 Litecoin.
When the green line tops the red line, the Litecoin is in a positive trend. However, when the situation turns around, the trend has also changed to a negative trend for Litecoin.
Furthermore, the black line gives the strength of the current trend of Litecoin, both positive and negative. The higher the black line (ADX), the stronger the trend.
Litecoin 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 Litecoin is assumed to be positive. An important signal is when the -DI (red line) and +DI (green line) crosses over.
The Litecoin currently follows a negative trend. For Litecoin, the positive directional indicator is 47.20. The value for the negative directional indicator is higher (51.34). This means that the current trend of the Litecoin is negative.
To measure the strength of the current trend, we look at the ADX. The value of the ADX for Litecoin is 19.09, meaning that the trend is very weak. The ADX for Litecoin does not give us a good indication to start buying or selling Litecoin.
To get a good signal to trade Litecoin, we have to wait until the trend gives us a higher ADX value in the current negative trend.