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.

  1. Large changes show substantial movement, but the sequence alone does not establish persistent direction.
  2. 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.

Does a large ATR alone prove a high ADX?

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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Sources and documentation

  • StockCharts – ADX

    ADX strength and directional DI components; strength is separate from direction.

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