Average Directional Index - ADX

What is the 'Average Directional Index - ADX'

The average directional index (ADX) is 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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RELATED FAQS
  1. How do technical analysts interpret the Average Directional Index (ADI)?

    Learn what the average directional index is and why technical analysts look towards ADX indicators to measure the strength ... Read Answer >>
  2. Does a strong trend (ADX > = 40) cause an increase in volatility?

    In technical analysis, there have been numerous indicators invented for identifying trends. One of the most common of these ... Read Answer >>
  3. What are the main signals traders use when following the Average Directional Index ...

    Learn how the average directional index, or ADX, measures momentum and strength in market trends and how specific signals ... Read Answer >>
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    Learn about two of the best technical indicators recommended for traders to use to refine a trading strategy based on the ... Read Answer >>
  5. How do I use the Directional Movement Index (DMI) for forex trading?

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  6. How is the Average Directional Index (ADX) calculated and what is the formula?

    Learn about average directional index, or ADX, indicators, including the calculations for various elements of the ADX technical ... Read Answer >>
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