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Analysis

Average directional index (ADX) — definition & meaning

An indicator measuring trend strength, regardless of direction.

The ADX measures how strong a trend is on a 0–100 scale, without saying which way it is going. Readings above roughly 25 suggest a trending market; low readings suggest a range.

Traders use ADX to decide whether trend-following or range-trading tools are more appropriate right now. It is a filter, not an entry signal on its own.

The information on Trding.io is for general information only and is not investment advice. Trading involves a real risk of losing money, and most retail traders lose. Never trade money you cannot afford to lose.

Related terms

Trend
The general direction a market is moving over time.
Average true range (ATR)
An indicator that measures how much an instrument typically moves.
Moving average
A line that smooths price by averaging it over a set number of periods.
Volatility
How much and how quickly a price moves over time.
Volume
The number of units traded over a period — a gauge of activity.
Support
A price level where buying has tended to stop a decline.

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