How to Use the Average Directional Index (ADX) to Measure Trend Strength
What is the Average Directional Index (ADX)? The Average Directional Index (ADX) is an indicator used to measure the strength of a trend, regardless of its direction. ADX values range from 0 to 100, with higher values indicating a stronger trend.
ADX above 25: Indicates a strong trend.
ADX below 20: Indicates a weak trend or sideways market.
How to Use ADX in Trading Traders use the ADX to confirm whether the market is trending or consolidating. If ADX is rising, it suggests the trend is gaining strength, while a falling ADX signals a weakening trend.
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