Average Directional Index - ADX


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.

  1. Indicator

    Indicators are statistics used to measure current conditions ...
  2. Trend

    The general direction of a market or of the price of an asset. ...
  3. Reversal

    A change in the direction of a price trend. On a price chart, ...
  4. Uptrend

    Describes the price movement of a financial asset when the overall ...
  5. Directional Movement Index - DMI

    An indicator developed by J. Welles Wilder for identifying when ...
  6. Downtrend

    Describes the price movement of a financial asset when the overall ...
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