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Trend Indicators

Average Directional Index (ADX)

The Average Directional Index (ADX) is used to determine when the price is trending strongly. It is non-directional, meaning it quantifies trend strength whether the price is going up or down. It is often plotted with +DI and -DI lines.

Dynamic Chart Demo

Indicator Line Price

* This chart uses synthetic data to demonstrate the indicator's behavior in typical market conditions.

Core Usage

Trend Strength: ADX > 25 indicates a strong trend.
Trend Weakness: ADX < 20 indicates a weak trend or ranging market.
Direction: Use +DI and -DI crossovers to determine trend direction.

Advantages

  • Excellent filter for trend-following strategies
  • Helps avoid trading in choppy markets
  • Measures pure trend strength

Limitations

  • Lagging indicator
  • Does not indicate direction by itself
  • Can be slow to react to sharp reversals

Calculation Logic

ADX = SMA of DX over n periods, where DX = |(+DI - -DI) / (+DI + -DI)| * 100

Understanding the mathematical logic behind indicators helps you interpret signals more accurately and avoid misuse in unsuitable market environments.

Common Trading Strategies

Strategy 1

ADX Trend Filter

Only take trend trades when ADX is above 25.

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Applied by 2.4k+ traders
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Signal simulation for: ADX Trend Filter
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Strategy 2

DI Crossover

Buy when +DI crosses above -DI (with high ADX); Sell when -DI crosses above +DI.

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Applied by 2.4k+ traders
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Signal simulation for: DI Crossover
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Best For

「Filtering out non-trending markets.」

Note: Technical indicators are mathematical calculations based on historical price and volume. They should be used as part of a comprehensive trading system, not as a standalone entry signal.

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