Condition: ADX / DMI

The "ADX / DMI" function in OptionsApp allows you to define entry and exit conditions based on the Average Directional Index (ADX) and the Directional Indicators (+DI and -DI). These indicators are used to measure the trend strength and trend direction of an Underlying and can be flexibly used as Entry and Exit Conditions.

1. Brief Description of the Indicator

ADX measures the strength of a trend - regardless of whether it's moving up or down. The +DI line (positive Directional Indicator) shows the strength of upward movements, while the -DI line measures downward movements. In combination, crossovers of the lines can be interpreted as possible trend reversals.

2. How It Works in OptionsApp

In the Configurations section, you can create a new Entry and Exit Condition using the plus icon. There you'll find DMI (ADX) and DMI (+DI) available under "Indicator".

Operation follows the familiar left-to-right principle:

• Select the Underlying to be analyzed (e.g., SPX)
• Select the Entry or Exit Condition: DMI (ADX) and/or DMI (+DI)
• Select the specific signal to be checked (see below)
• Enter the parameters

3. Configurable Options

Generally, trend strength (ADX) and directional signal (+DI) can be configured independently. In most cases, these indicators are used together.

In OptionsApp, this must be done via an AND combination of two Entry or Exit Conditions:

In the example above, the following settings were made:

• Condition 1:
  • ADX > 25: Trade opening only occurs above a certain trend strength (here: 25)
  • The length and smoothing were each set to value = 14
• Condition 2:
  • The +DI should be greater than the -DI: This is intended to detect an uptrend
  • The length was set to value = 14 for both +DI and -DI
• Combination:
  • The trade is only opened or closed when the trend is sufficiently pronounced (ADX>25) and at the same time an upward signal is present (+DI > -DI).
  • All settings were implemented using the Minute time unit.

For downward signals, use the less-than symbol (<) instead of the greater-than symbol (>).

4. Calculation Logic

The calculation follows the technical definition as on platforms like TradingView (or ta.rma):

• ADX is calculated via a smoothed average (RMA) of the difference between +DI and -DI.
• The +DI / -DI values themselves are created by evaluating price movements based on highs and lows.
• Smoothing is applied with two adjustable periods: one for DI, one for ADX.

This logic is consistent with the well-known implementation on TradingView. The logic in OptionsApp mirrors this 1-to-1.

5. Use Cases

• Example 1: Only trade when a strong trend is present:
  • ADX > 20
  • Time horizon: 1h
  • Goal: Entry only during clear market movement
• Example 2: Trading on a possible trend reversal to the upside:
  • Condition: DI+ > DI-
  • Goal: Entry after confirmed momentum change

6. Notes

• The calculation is based on historical candles (bar data).
• If insufficient data is available at a planned Entry/Exit time (e.g., at fresh market open), the Entry or Exit Condition cannot be evaluated - the trade will not be opened.
• ADX/DMI can be combined with other Entry Conditions (e.g., RSI, SMA, etc.)