DX = DI Difference divided by the sum of +DI14 and -DI14

DX = DI Difference divided by the sum of +DI14 and -DI14

http://www.incrediblecharts.com/indicators/directional_movement.php#directional_movement-formula

Formula

To calculate the Directional Movement System:

1. Calculate the Directional movement for today
   +DM = Today's High - Yesterday's High (when price moves upward)
   -DM = Yesterday's Low - Today's Low (when price moves downward)
   You cannot have both +DM and -DM on the same day. If there is an outside day (where both calculations are positive) then the larger of the two results is taken. An inside day (where both calculations are negative) will always equal zero.
2. Calculate the true range for the day. True range is the largest of:
   Today's High - Today's Low,
   Today's High - Yesterday's Close, and
   Yesterday's Close - Today's Low
3. +DM14 = exponential moving average* of +DM
4. -DM14 = exponential moving average* of -DM
5. TR14 = exponential moving average* of True Range
   
   Next, calculate the Directional Indicators:
6. +DI14 = +DM14 divided by TR14
7. -DI14 = -DM14 divided by TR14
   
   Then, calculate the components of the Average Directional Movement Index (ADX):
8. Calculate the DI Difference:
   Record the difference between +DI14 and -DI14 as a positive number.
9. Calculate the Directional Index (DX):
   DX = DI Difference divided by the sum of +DI14 and -DI14
10. ADX = the exponential moving average* of DX

ADX POWER SHORT SETUP

􀂄 Price has a consolidation period for at least 30 bars (any timeframe) with a price pattern.

􀂄 ADX is less than 25 during the consolidation (preferably less than 15).

􀂄 Both DMI lines are above ADX prior to the breakout.

􀂄 The –DMI makes a crossover high as price breaks below the bottom trendline.

􀂄 Price retraces to the 20 EMA and holds (first retracement)

while –DMI makes a pivot low at or near 25.

􀂄 Enter short on a price pivot high reversal (down).