Average Directional Index (ADX)

What is the definition of Average Directional Index (ADX)?

The average directional movement index (ADX) was developed in 1978 by J. Welles Wilder as an indicator of trend strength. The ADX ranges between 0 to 100 : the higher the oscillator, the stronger the trend. Generally, ADX readings below 20 are said to indicate trend weakness, and readings above 40 indicate trend strength. An extremely strong trend is indicated by readings above 50.

Stockopedia explains Average Directional Index (ADX)...

The ADX does not indicate trend direction, only trend strength. It is a lagging indicator; that is, a trend must have established itself before the ADX will generate a signal that a trend is under way.

You can read more about ADX on Wikipedia here

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