ADX (Average Directional Index) — Complete Reference
Trend strength indicator measuring the strength of a trend without indicating direction.
What ADX measures
ADX, developed by J. Welles Wilder, measures the strength of a trend on a 0-100 scale, without indicating direction. Built from two underlying lines: +DI (positive directional indicator) and -DI (negative directional indicator).
Standard ADX thresholds
ADX < 20 = no trend / range-bound. ADX > 25 = trend strong enough to follow. ADX > 40 = strong trend, often extended. ADX is the single best filter for 'should I take this trend-following signal right now or not?'
Direction from +DI vs -DI
When +DI > -DI, the trend is up. When -DI > +DI, the trend is down. ADX tells you HOW strong; +DI vs -DI tells you WHICH direction.
Using ADX as a filter
Most trend-following indicators (MACD, MA crossovers, breakout setups) work much better when ADX confirms a trend exists. A typical rule: only act on MACD crossovers when ADX > 25. Filters out the worst false signals in chop.
Where ADX fails
ADX is a lagging indicator. By the time ADX has crossed 25, the trend is well underway. It's a confirmation tool, not an early signal.
ADX divergence with price
When price makes new highs but ADX is declining = trend exhaustion. The trend exists but is losing strength. Often precedes consolidation or reversal.
Combining ADX with momentum
ADX + RSI: trade RSI extremes only when ADX is low (range-bound markets). Avoid RSI threshold trades when ADX is high (trends extend past extremes). This single rule fixes most retail RSI losing trades.
Free ADX scanners
SultraxAI uses ADX as a regime filter in its signal model — signals only fire when ADX confirms a trend exists. View live data →