MetaStock ADX vs. RealTick ADX

Discussion in 'Technical Analysis' started by garyk, Nov 7, 2002.

  1. garyk

    garyk

    I'm looking at using the ADX to select between a Stochastic and a
    moving average crossover system as appropriate for trending vs.
    channeling/cycling conditions.

    Can anyone shed some light on the difference between the ADX
    indicator displayed in RealTick and the ADX function in MetaStock?
    When I plot them on the identical price data in the two different
    software packages, the results are completely different. The
    RealTick ADX behaves as I would expect, with significant variations between higher values (> 30 or so) for trending conditions and lower values (< 30 or so) for channeling conditions. The RealTick ADX line also begins 14 days after the start of the data for a 14-period ADX. The MetaStock ADX is nearly a flat line, and begins 28 days after the start of the data (for a 14-period ADX). It looks like it's being smoothed a second time.

    I've done some investigation but have not yet done a spreadsheet to re-creat Wilder's formulas from his "New Concepts in Technical Trading Systems". That's my next step, but I thought someone else may have already figured it out.

    So far it looks to me like it's a difference in terminology - that
    the ADX in RealTick is actually Wilder's DX, or the MetaStock DX is
    actually Wilder's ADX. I also note that MetaStock's custom formula
    library includes a custom indicator which calculates ADX and ADXR
    without rounding, with the note that the built-in indicator is exactly the same as Wilder's original calculations. I wouldn't think
    that the rounding difference would be large enough to account for the difference between the two software packages.

    Thanks.

    Gary