Forex glossary
Trend Strength
Trend strength describes persistence of directional movement under a selected measure. ADX is one approach that does not identify direction; 20/25 thresholds are conventions dependent on settings and market conditions. Strength is distinct from high volatility, visual chart steepness or expected trading profitability.
Illustrative example
How does it work in practice?
Assume ADX rises from eighteen to twenty-eight while −DI exceeds +DI. With unchanged settings, this indicates stronger directional movement with a bearish interpretation; the rising ADX itself does not imply rising prices.
A case to work through
Wide moves in both directions
Hypothetically, price moves 100→110→100→110, with each leg spanning 10.
- Large changes show substantial movement, but the sequence alone does not establish persistent direction.
- Assessing strength with ADX requires its inputs and settings rather than candle width alone.
What follows? Do not assign a high ADX solely from volatility.
Example boundary: Other strength measures have other definitions; axis scaling can alter apparent steepness.
A useful distinction
Trend Strength / Volatility Indicator
Trend strength concerns directional movement under a measure; volatility describes range or dispersion without selecting direction.
Check your understanding
Recognize insufficient reasoning based on wide candles.
Show the answer and explanation
No; the measures describe different properties
Range and directional movement are not the same.
Direction and strength tools
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Related terms
Sources and documentation
- StockCharts – ADX
ADX strength and directional DI components; strength is separate from direction.
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