Average Directional Index (ADX)

ADX (Average Directional Index) is an indicator developed by J. Welles Wilder that measures the strength of a trend, not its direction. It ranges from 0 to 100; readings above 25 typically signal a strong trend, while readings below 20 suggest a ranging market. The standard look-back period is 14, and the accompanying +DI and −DI lines indicate direction.