Average Directional Index — measures the strength of a trend regardless of direction. Values above 25 suggest a strong trend; below 20 suggest a weak or absent trend. The ADX is often used alongside the DI+ and DI- lines to determine both trend strength and direction, making it a versatile tool for trend-following strategies.
Example
“The ADX climbed above 30, confirming the downtrend had strong momentum and encouraging traders to hold their short positions.”