Educational Post
Average Directional Index
The average directional index (ADX) is a technical analysis indicator used by traders to determine the strength of a trend.
The ADX makes use of a positive (+DI) and negative (-DI) directional indicator in addition to the trendline.
The trend has strength when ADX is above 25; the trend is weak or the price is trendless when ADX is below 20.
If the ADX is declining, it could be an indication that the market is becoming less directional, and the current trend is weakening. You may want to avoid trading trend systems as the trend changes.
