How to Calculate the Average Directional Index using Excel

The ADX is a technical indicator used to identify when the market is trending and when it is rangebound. Developed by J. Welles Wilder, the ADX is a useful guide for trend and range traders.
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[@InsightThoughtSystems]

Most of the "explanations" of calculating ADX I could find were lousy. Thank you for a very straightforward, succinct, easy-to-follow explanation.

[@700007123]

Awesome, very helpful! Thank you!

[@danielthompson9827]

Hey mate thanks for this video - I think it's important to mention as well that a lot of charting software included in online brokers will calculate the ADX/DMI using various moving averages (usually exponential) and in doing so the results can vary dramatically from your own data. When backtesting it's important to understand the concept of the indicator to adjust your own signals accordingly because an ADX range of 25 for example on your excel sheet may vary substantially from the chart on your broker page. Either way this video offers good insight of how technical indicator studies presented as graphs can be converted into data arrays allowing investors to backtest theories and concepts.

[@MarkUrsell]

Thanks for commenting. Good point.

[@GuyBaker555]

Daniel Thompson Thanks for that insight, I was wondering why the calcs do not match my FXCM trading station or MT4 indicator values.

[@RahulBhojwanipro]

Amazing Mark. You kept it sweet and simple! ;)

[@aberry7470]

Mark, great work! Greatly appreciated!

[@kersi23]

Thanks. Well explained. Much appreciated.

[@dianacarolina1523]

EXCELENTE TODOS TU VIDEOS HAN SIDO DE GRAN UTILIDAD

[@vaydada]

Thanx a lot Mark. Very helpful indeed.

[@MarkUrsell]

Glad it was helpful!

[@laxmikantjain9663]

Hi. Thanks for information. Could you please add histogram representation also in this sheet according to buyer & seller.

[@engstrom3431]

thanks the best guide ever, helped a lot

[@MarkUrsell]

+Engström Production Thanks for the comment. I always appreciate the feedback. Please let me have any suggestions for more videos.

[@billz7100]

Mark, do you have a KZbin video on how to calculate the OBV indicator in Excel?

[@lakshmanmadurai]

Great bro..well job.. Thanks a lot Thanks to universe

[@Emotekofficial]

Thanks alot for this. I created a Python Function following exactly!

[@MarkUrsell]

Nice work!

[@kropinskipawel]

Very good channel - thanks for sharing

[@MarkUrsell]

Thanks very much for the feedback Pawel.

[@kropinskipawel]

Sure thing! Have you ever looked at Belkhayate Indicator - Not sure if polynomial regression is doable in excel - but might be fun to investigate.

[@MarkUrsell]

No, I haven't heard of Belkhayate Indicator but I will look into it. Thanks for the suggestion.

[@Claudio-xb2hr]

HI thanks for the tutorial Are your results the same as the data on Tradinview? I used EMA , SMMA and Wilder EMA to calculate the DM but I don't have the same data as Tradingview

[@yusufacc8917]

hi cuz tradingwiews atr calculation method is not sma tradingwiew using rma for calculating atr u must build your own adx

[@Macam2macam]

Thanks, man.

[@premswami3262]

pls share this excel sheet to us

[@thebambooflute4870]

Thanks Mark,

[@gilrachirag2355]

can i use 14 day time instead of taking time by time basis?

[@sophia.sjournal6358]

Hallo Mark, vielen Dank für die Herleitung der Berechnung in Excel! Hat mir persönlich sehr geholfen, allerdings ist die Berechnung der Mittelwerte (ATR, +DX, -DX) unverständlich. Sie berechnen ab der Schleife den Mittelwert 13 und addieren den folgenden Wert dazu. Der darauffolgende Mittelwert (14) ist somit verfälscht. Beispiel: Zahlenfolge 1,2,3,4 - Mittelwert(4)=(1+2+3+4)/4 =2,5 . Ist die nächstmögliche Zahl die 5 dann ergibt sich ein Mittelwert(4) = (2+3+4+5)/4=3,5. In Ihrer Rechnung würde es lauten Mittelwert (4)=(2,5*3 + 5)/4=3,125. Trotz alle dem gute Veranschaulichung.

[@cryp0g00n4]

Do you have an example excel that we can follow along with this video?

[@cryp0g00n4]

This is a good video none the less

[@eknoormalhotra1066]

Beautifully explained. Thanks a ton!

[@MarkUrsell]

Glad it was helpful!

[@rahuljp54]

Do you use ATR for trading?

[@shajahanismail258]

Dear Mark, How to calculate ATR in excel? Please

[@raghavexplore1638]

how did you calculate True Range?

[@MarkUrsell]

Hi Raghav, the True Range is the greatest of: High-Low, absolute value of Previous Close - Low, absolute value of Previous Close - High

[@Emotekofficial]

The smoothing technique you used for N periods =2*(N)-1 of Exponential Smoothing where N is the number of periods For eg if you chose 14 periods in this kinda smoothing which will be equal to do EMA Smootheing as 2*(14)-1 periods i.e. 27 periods Check your self it's statistically significant.

[@javi4246]

Please, could you tell me where I can see how you calculate the ATR? thx

[@tongafabre]

kzbin.info/www/bejne/l2jTf4aAgZeMe7c

[@741980abhi]

Please make a fresh video for Adx in google sheets

[@sahl04]

At 2'10'' of the video the calculation of the ATR with ((PrevATR * 13) + CurrentTR) / 14 might not be ok. For comparison please add another column where you do a real 14 item average calculation.

[@GuyBaker555]

sahl04 What do you mean not OK?

[@o0flavionunes0o]

you are using smoothed mobile media, would not the correct calculation be with exponential moving average to calculate the adx and the ATR according to the link? www.tradingview.com/wiki/Directional_Movement_(DMI)

[@MarkUrsell]

Hi, thanks for the comment. The smoothed average is used in the original version of the indicator as created by J Welles Wilder. I don't think the type of average is important, they both work. But it is worth understanding the difference. If you compare an exponential average with a smoothed average on a chart, you can see that the exponential reacts quicker to price changes. So the ADX created with a smoothed averaged will be slower to change than an ADX created with a smoothed average.

[@premswami3262]

great wotk

[@deanbanko5788]

Why does the Excel calculated +DMI not equal to +DI, -DMI not equal to -DI, and ADX not equal to the ADX from the MT4?

[@shekharmahamuni6322]

Dear Dean Banko, I too was confused becz my results didn't match with the results of the charting software that I use.......but checking the results after 200-300 candles what I observed that the values in my excel sheet started matching with that on the charting software......I think its bcz it needs some smoothing period.....So try and check the results after 400-500 candles.....I am sure it will match with MT4 values.

[@billmietelski]

Bill was here.