Average Directional Index (ADX) calculations are based on a moving average of price range expansion over a given period of time. The calculation developed by Welles Wilder is shown as below:

• Calculate the True Range for what will eventually be our +DI and -DI lines. True range is the greatest of the following: Current High minus current Low; Current High minus previous Close (absolute value); Current Low minus previous Close (absolute value).
• These values then need to be “smoothed,” typically over 14 days. Smoothing is discussed below.
• Divide the smoothed +DI by the 14-day smoothed True Range to find the 14-day +DI value, which will be used as the line on the chart. Multiply by 100.
• Divide the smoothed -DI by the 14-day smoothed True Range to find the 14-day -DI value, which will be used as the line on the chart. Multiply by 100.
• The Directional Movement (DX) equals the absolute value of +DI minus -DI divided by the sum of +DI and – DI.
• Average Directional Index (ADX) is a 14-day average of DX. All following ADX values are smoothed by multiplying the previous 14-day ADX value by 13, then adding the most recent DX value and dividing this total by 14.

Smoothing

To get the smoothed +DI and -DI values, use the following steps for each:

• Sum 14 True Ranges to get TR14
• Smooth it: TR14 – (TR14/14) + Current TR
• For following calculations: Prior TR14 – (Prior TR14/14) + Current TR14

To get the ADX values, use the following steps:

• ADX14 = 14 period Average of DX
• Following ADX values = ((ADX14 x 13) + Current DX Value)/14

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