Superior ADX/DMI

This is a classic indicator remade by ninZa.Co. ADX/DMI is a great combo to identify market conditions. If ADX is below a threshold (generally 20-25), the market is characterized as "chop". If ADX meets the threshold, the market is trending:

• If DMI+ is above DMI-, we have an uptrend.
• If DMI+ is below DMI-, we have a downtrend.

Just that simple, but in reality traders will find it really difficult and time-consuming to interpret the plots because we have as many as 3 plots to take into account. Don't worry! Our Superior ADX/DMI handles all these interpretations and paint chart background for you to easily read:

• Green background: uptrend (only search for long signals)
• Pink background: downtrend (only search for short signals)
• Normal background: chop market (don't trade)

From our researches, we discovered that using a very small ADX/DMI period with a little smoothing provides much better trend detection. That's why we use a period of 3 for ADX/DMI, smoothed by HMA 2 in the default settings of the indicator.

A tremendously powerful feature of our indicator is ADX peak/exhaustion recognition, which often signals trend slowdowns or reversals accurately. For your information, an ADX exhaustion is a peak occurring in the high ADX zone (you define the threshold for the zone, e.g. 80).

From our experiences, ADX exhaustion detects trend reversals or retracements to extremely high accuracy. This feature is, therefore, the priceless part of this indicator. By default, ADX peaks are marked with diamonds (♦♦) and ADX exhaustions are marked with stars (★★) - but you can redefine the symbols to your liking. The ADX plot is conditionally colorized to reflect different market periods: chop, exhaustion, uptrend rise/fall, downtrend rise/fall.

Key features:

• Plot ADX, DMI+, DMI-
• Allow smoothing ADX with any of
  11 popular moving averages
• Allow smoothing DMI+, DMI- with any of
  11 popular moving averages
• Allow defining 2 thresholds for high ADX and mid ADX
• Paint background to show 3 market phases: uptrend, downtrend, chop
• Colorize ADX based on 6 conditions: chop, exhaustion, uptrend rise, uptrend fall, downtrend rise, downtrend fall
• Colorize bars based on 2 phases: uptrend, downtrend
• Print markers on trend start
• Trigger alerts on trend start
• Print markers on ADX peak/exhaustion
• Trigger alerts on ADX peak/exhaustion
• Be NinjaScript ready for advanced usage, only restricted by your imagination
• Expose dedicated NinjaScript signals

Dedicated NinjaScript signals:

• Signal_State: 0 = chop, 1 = uptrend, -1 = downtrend
• Signal_Peak: 0 = no ADX peak, 1 = ADX peak bullish, 2 = ADX exhaustion bullish, -1 = ADX peak bearish, -2 = ADX exhaustion bearish