Description and Understanding of ADX (Average Directional Index)
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Average Directional Index (ADX)

ADX, commonly called the Average Directional Index, is a technical indicator on a chart that functions to measure the strength of a trading instrument’s trend, whether it is trending up or down.


ADX shows whether an asset such as a currency pair, stock, or crypto is trending or not and how strong the trend tends to be. This indicator is calculated based on the difference between the +DI and -DI lines.


ADX values range from 0 to 100. The higher the value, the stronger the trending signal. Values below 25 indicate the absence of a clearly defined trend. Reading ADX along with +DI and -DI is important to determine the direction of the trend.


Examples of “ADX” in use in sentences


“Bitcoin ADX values exceeding 40 indicate a very strong bullish trend recently.”


“ADX is used by traders to identify the momentum of a trend and determine the right trading entry point.”


“When ADX is low, prices tend to move sideways, so it is not suitable for a trend-following strategy.”




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