The ADX is a non-directional indicator. This means that it determines the market trend strength regardless of which direction the prices are fluctuating towards. To assess the strength of the prices moving in positive and negative directions, the <strong>Directional Movement System</strong> (DMI+ and DMI- indicators) is utilized.</p>\n<p>The ADX is represented by a line using figures from 0 to 100. It is typically shown in the same window as the two lines known as directional movement indicators (DMI). DMIs are used to calculate the ADX.</p>\n<h2>How to Calculate the Average Directional Index (ADX):</h2>\n<p>1. Calculate Directional Movement (+DM) using the formula:</p>\n<p>+DM = Current High - Previous High</p>\n<p>2. Calculate -DM using:</p>\n<p>-DM = Previous Low - Current Low</p>\n<p>3. Select between +DM and -DM based on which option has the higher value.</p>\n<p>4. Calculate the True Range (TR) using one of the following:</p>\n<p><strong>Current high - Current low; Current low - Previous close; Current high - Previous close</strong></p>\n<p>5. Calculate the smoothed 14-period averages of the TR, the +DM, and &ndash;DM using:</p>\n<p>First 14TR = Sum of first 14 TR readings</p>\n<p>Next 14TR = first 14TR &ndash; (prior 14TR/14) + current TR</p>\n<p>6. Calculate the +DI and -DM values using:</p>\n<p>+DI = (Smoothed +DM / ATR) x 100</p>\n<p>-DI = (Smoothed -DM / ATR) x 100</p>\n<p>7. Calculate the directional movement index (DMI) using the equation:</p>\n<p><strong>DX = ( | +DI - -DI | &nbsp;/ | +DI + -DI | ) x 100</strong></p>\n<p>8. Calculating ADX requires the DX for all 14 periods. To calculate the first ADX, divide the sum of all 14 periods of DX by 14. For the remaining 13, use the formula:</p>\n<p>ADX = (Previous ADX x 13) + Current ADX) / 14</p>\n<p>The process of computing the ADX is entirely automated, so there is no need to manually apply the formulas to calculate the final indicator.</p>\n<p>Other commonly used indicators in trading are the <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-accumulation-distribution-indicator/">Accumulation/Distribution Indicator</strong></a>, <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-moving-average-convergence-divergence-macd/">Moving Average Convergence Divergence (MACD)</strong></a>, <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-on-balance-volume-obv/">On-Balance Volume (OBV)</strong></strong></a>, and <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-relative-strength-index-rsi/">Relative Strength Index (RSI)</strong></a>.</p>","level":"medium","meta_title":"What is Average Directional Index (ADX)? Definition & Meaning | Crypto Wiki","meta_description":"Average Directional Index (ADX) meaning: Average Directional Index (ADX) - an indicator used to measure the strength of a market trend. The ADX is represented by numeric figures between 1 and 100.","meta_keywords":null,"language":"en","created_at":"2022-02-11T09:05:04.000000Z","updated_at":"2022-05-13T14:32:22.000000Z","preview_url":"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-average-directional-index-adx"},"prevSection":{"id":67,"original_id":null,"author_id":41,"translator_id":null,"title":"What is Augmented Reality (AR)?","slug":"what-is-augmented-reality-ar","section":"A","keyword":"Augmented Reality (AR)","status":"published","definition":"a technology that allows three-dimensional digital objects to be seen and interacted with in the real world.","content":"<p><strong>Augmented Reality (AR)</strong> is a technology that brings elements of the virtual world into the real world and creates interactions between the two in real life. AR systems can make virtual items appear as three-dimensional images in the real world.</p>\n<p>Augmented reality differs from <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-virtual-reality-vr/">virtual reality (VR)</strong></a> as AR only alters the perception of the world with digital technology, while VR replaces the real-world environment with a virtual space altogether.</p>\n<p>Augmented reality has been applied to various <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-blockchain/">blockchain-based systems</strong></a>, applications, and <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-token/">tokens. Perhaps the most prominent use of AR is the development of digital assets known as <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-non-fungible-token-nft/">non-fungible tokens (NFTs)</strong></a>.</p>\n<p>Non-fungible tokens are unique assets that cannot be traded for another token of equal value. They are often described as digital collectibles and in some instances can even be personalized. Most types of digital objects, like images or audiovisual files, can be used to create an NFT.</p>\n<p>Some NFTs utilize AR technology. This functions as a visualization of the digital item that the token is tied to. NFTs created using 3D rendering software may be visualized in the real world using special websites or apps. NFTs made with AR or 3D technologies can be perceived as small-scale virtual reality experiences.</p>\n<p>AR-based NFTs have become increasingly popular among both visual artists creating them and the buyers. AR and 3D NFTs add another spin to the uniqueness of the tokens. They may be valued at a higher rate due to the technology involved in creating them and their possible <strong>interactivity</strong>.&nbsp;</p>\n<p>NFTs can help artists interact with their possible sponsors or fans directly, as they can sell the art without involving a third party. Furthermore, creating an NFT of 2D art does not require extensive technical expertise or immense knowledge about crypto or blockchain.</p>\n<p>AR NFTs are more technologically complex as they require the visual signals responsible for letting digital objects appear in the real world to be integrated into the token.</p>\n<p>The development of NFTs that use AR technology may be perceived as a transitional step into <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-metaverse/">metaverse, a type of virtual reality that is expected to heavily utilize NFTs for user personalization and as digital collectibles.</p>","level":"medium","meta_title":"What is Augmented Reality (AR)? Definition & Meaning | Crypto Wiki","meta_description":"Augmented Reality (AR) meaning: Augmented Reality (AR) - a technology that allows three-dimensional digital objects to be seen and interacted with in the real world.","meta_keywords":null,"language":"en","created_at":"2022-02-11T08:43:53.000000Z","updated_at":"2022-05-13T14:32:22.000000Z","preview_url":"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-augmented-reality-ar"},"currentChapter":"A","currentSection":"what-is-automated-market-maker-amm","chapterTitle":"A","readingLevel":"easy"},"url":"/crypto/learn/crypto-terms/what-is-automated-market-maker-amm","version":"cdd198d50cbe5c9c21c9329d7c096ffc"}" class="container-fluid d-flex crypto-book p-0">

All Crypto From

Scratch!

Crypto 101 Handbook

Chapter 1: Blockchain

• 1.1

  What is the Blockchain?
  1.2

  Anonymous & Decentralized Blockchains: The Cornerstone of Crypto
  1.3

  What is a Blockchain Transaction in Crypto?
  1.4

  The Different Types of Crypto Fees Explained
  1.5

  The Key Notion Behind the Concept of Bridging in Crypto
  1.6

  Different Types of Blockchains: What to Look Out For?

Chapter 2: Cryptocurrencies

• 2.1

  What is a Cryptocurrency?
  2.2

  How Does Cryptocurrency Work?
  2.3

  Is Cryptocurrency a Good Investment? The Pros & Cons
  2.4

  Coin VS Token: How Do They Differ?
  2.5

  What are Stablecoins, Altcoins & Wrapped Coins?
  2.6

  Bitcoin: the Pioneer of the Crypto World
  2.7

  The Ultimate Blockchain for dApp Creation: Ethereum
  2.8

  What is Cardano and What is It Used For?
  2.9

  Shiba Inu: the Dogecoin Killer
  2.10

  Is Solana an Improved Version of Ethereum?
  2.11

  The Bridge Between Blockchains: Polkadot
  2.12

  Polygon: the Essential Scaling Solution for Ethereum
  2.13

  The Practical Use of Crypto

Chapter 3: Crypto Exchanges

• 3.1

  How do Cryptocurrency Exchanges Work?
  3.2

  DEX VS CEX: Two Sides of the Crypto Exchange Industry
  3.3

  Crypto Day Trading: The Difference Between Buying, Trading, and Swapping
  3.4

  KYC & AML: The Key to Complying With Legal Industry Standards
  3.5

  From Fiat to Crypto: How to Buy Crypto for the First Time
  3.6

  Taking Profits: Turning Crypto Into Fiat
  3.7

  You’ve Got Crypto: What Can You Do With It?

Chapter 4: Crypto Wallets

• 4.1

  What is a Crypto Wallet?
  4.2

  Hot Wallet VS Cold Wallet: Which One to Pick?
  4.3

  What are Non-Custodial Crypto Wallets?
  4.4

  Metamask: The Leading Non-Custodial Wallet
  4.5

  The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?

Chapter 5: NFTs

• 5.1

  What are Non-Fungible Tokens (NFTs)?
  5.2

  NFT Trading: The Ins and Outs
  5.3

  Tips and Tricks of Choosing the Right NFTs
  5.4

  How to Store NFTs: Best Practices
  5.5

  How to Create Your Own NFTs?
  5.6

  Making Passive Money with NFTs

Chapter 6: dApps & Defi

• 6.1

  What is Decentralized Finance (DeFi)?
  6.2

  DeFi 2.0: The New Version of Decentralized Finance
  6.3

  What Are dApps and How Do They Work?
  6.4

  Picking the Right dApps: Dos and Don'ts
  6.5

  Web 3.0: The Future of the Internet
  6.6

  What is the Core Purpose of Smart Contracts?
  6.7

  The Notion of a Decentralized Autonomous Ogranization (DAO)
  6.8

  What is the Goal of Staking Crypto Assets?
  6.9

  What is a Liquidity Pool and How Does It Work?
  6.10

  Automated Market Maker: the Cornerstone of the Decentralized Crypto Exchange Industry
  6.11

  The Main Yield Farming Techniques
  6.12

  Crypto Oracles: The Link Between Blockchain and Outside World Data
  6.13

  The Peculiarities of Decentralized Crypto Gambling
  6.14

  Metaverse: A New Perception of Reality

Chapter 7: Trading & Investing

• 7.1

  Where Can You Trade Cryptocurrencies?
  7.2

  Investing in Crypto: What Investing Options Do You Have?
  7.3

  ICO vs IDO vs IEO: Which One is the One?
  7.4

  What are Crypto Airdrops and How to Get Them?
  7.5

  How to Get Free Crypto Assets?
  7.6

  What is Crypto Arbitrage: The Main Principles
  7.7

  What is FUD: How to Use It to Your Advantage While Investing in Crypto?
  7.8

  Investing in Cryptocurrency: How to Manage Your Risks?
  7.9

  What is a Rug Pull in Crypto?
  7.10

  How to Spot and Avoid Rug Pulls?
  7.11

  The Key Legal Techniques of Avoiding Crypto Taxes

Chapter 8: Crypto Analysis

• 8.1

  Bearish and Bullish Markets: Do They Matter?
  8.2

  5 Best Crypto Technical Analysis Indicators You Must Know About
  8.3

  Technical Analysis: What are Candlesticks, Trendlines, and Patterns?
  8.4

  Crypto Tracking: How to Track Your Favorite Coins & Tokens?
  8.5

  Crypto Research Fundamentals & Social Signals: Your Daily Trading Strategy

Chapter 9: Mining

coming soon

Chapter 10: Crypto Terms

• 10.1

  All Crypto Terms

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