Average Directional Index - ADX

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DEFINITION of 'Average Directional Index - ADX'

An indicator used in technical analysis as an objective value for the strength of trend. ADX is non-directional so it will quantify a trend's strength regardless of whether it is up or down. ADX is usually plotted in a chart window along with two lines known as the DMI (Directional Movement Indicators). ADX is derived from the relationship of the DMI lines.

Average Directional Index (ADX)

BREAKING DOWN 'Average Directional Index - ADX'

Analysis of ADX is a method of evaluating trend and can help traders to choose the strongest trends and also how to let profits run when the trend is strong.

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