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Average Directional Index & Vortex Indicator

by | Dec 13, 2020

Disclaimer: Posts on the HyperTrader blog and associated HyperLinq websites are for educational and informational purposes only. These posts should not be taken as financial advice, nor are they meant to be viewed as trading advice. HyperLinq Inc. or the authors take no responsibility for any damages or losses.

When trading crypto assets, it is crucial to recognize market conditions. Crypto traders will use several technical analysis tools at the same time to better understand market conditions. This blog will discuss two technical indicators, the Average Directional Index & Vortex Indicator, which help crypto traders make better trading decisions in markets like BTC & ETH.

Average Directional Index

The Average Directional indicator is a directional trading tool used to distinguish a price trend. ADX gauges the strength of the price trend in the crypto market and confirms price movement. ADX is outlined as a single line with prices varying from zero to one hundred. ADX is non-directional; it records trend depth whether the price is going up or down. ADX conditions assist crypto traders in recognizing the most reliable and effective price trends to trade. The prices are also crucial for identifying between trending and non-trending market conditions. Numerous crypto traders will use the ADX interpretations above twenty-five to imply that the course is long-lasting enough for trend-trading strategies. On the contrary, when ADX is below twenty-five, many crypto traders will bypass trend-trading methods.

Vortex Indicator

Average Directional Index & Vortex Indicator
Average Directional & Vortex Indicator on HyperTrader

Etienne Botes and Douglas Siepman founded the Vortex Indicator in January of 2010. Since then, the Vortex Indicator has increased usage from traders as a substantial course following indicators that can provide reliable buy and sell signals. Nevertheless, it may entirely take several more years of market experimentation and practice to thoroughly assess the vortex indicator’s potential. The Vortex Indicator outlines two oscillating lines; the first line identifies positive trend change and locates negative price change. Intersection within the lines triggers buy and sell signals intended to obtain a powerful trending performance, which can be higher or lower. There’s no middle ground for the Vortex Indicator; it either will produce a bullish or bearish preference. 

Vortex Indicator structure depends on the highs and lows of the previous two periods. The length from the current high to the previous low indicates positive trend change, while the range between the current low and the previous high indicates negative trend change. Entirely positive or negative trend changes will display a more considerable extensive length within the two numbers, while more limited positive or negative trend change will present a shorter period.

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Head of Content Marketing @ HyperLinq. His love for Chai and mountains precedes everything. Often wonders about things like, "why $1 earned through leverage feels 100x better than $1 earned selling your time?"

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