Indicators & Analysis
Intermediate
ADX (Average Directional Index)
Also called: DMI
Measures trend strength on a 0–100 scale — does not indicate direction, only how strongly price is trending.
Definition
ADX (Wilder) tells you whether price is trending or ranging. Below 20: weak/range. Above 25: emerging trend. Above 40: strong trend. 50+: very strong.
ADX comes paired with +DI and −DI lines that show direction. ADX rising with +DI above −DI = strong uptrend. Use ADX as a filter: only take trend-following signals when ADX > 20.
Example
Your breakout system fires on EUR/USD but ADX is 14 — the pair isn't trending. Skip the trade or tighten the target.