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 May 23rd, 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 11/22/2021 until 05/23/2022. 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||27.85|
|Polkadot positive directional indicator||35.88|
|Polkadot negative directional indicator||59.96|
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 current directional indicator gives a negative signal for Polkadot. The positive directional indicator for Polkadot is 35.88, which is lower than the negative directional indicator (59.96). Therefore, the trend that Polkadot follows is negative.
The current ADX value is 27.85, which tells us that the current trend is strong. Using these values, we can asume that the Polkadot will continue its downwards trend. In short, the current average directional index gives us a selling signal for the Polkadot. However, you should always be aware, since trends are changing from time to time.