Average Directional Movement Index

Average Directional Index (ADX) is an indicator used to measure the strenght of the trend. ADX indicator consists of three lines: ADX line, as well as the +DI (positive directional indicator) and -DI (negative directional indicator). +DI and -DI are calculated on the basis of the high, low and closing prices. ADX is a smoothed average of these two lines. ADX ranges between 0 and 100. Values below 20 indicate lack of trend and the values above 25 indicate that the market is trending. ADX does not attempt to predict the direction of the trend itself.

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