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Tool Atlasmarket.adx

Tool

ADX (Average Directional Index)

market.adx

MarketTrend

Inputs

No typed inputs.

Outputs

Bundle (untagged)

A single 0–100 trend-STRENGTH line. Above roughly 25 signals a trending market and below 20 a ranging one. It measures strength only — it gives no clue about trend direction.

ADX (Average Directional Index) is a 0–100 line that measures how STRONG a trend is, not which way it points. A rising ADX means the move (up or down) is gaining strength; a low, flat ADX means the market is ranging.

ADX (Average Directional Index) overview diagram

How it works

Over a rolling window (the period, default 14 bars) it compares the strength of upward versus downward price movement, then smooths the combined directional strength into a single 0–100 line. Above about 25 is usually read as a trending market; below 20 as a weak or ranging one. ADX never tells you up or down — only how strong.

Configuration

periodscalar

How many bars to smooth the directional strength over. Larger = steadier ADX that confirms trends later; smaller = quicker but noisier. 14 is the classic default.

period diagram

Connects to

Feeds into

Examples

  • Gate trend-following entries on ADX above 25 so you only trade when a trend has strength.
  • Combine ADX (is there a trend?) with a directional tool like a moving-average slope (which way?).

Common mistakes

  • Reading a rising ADX as bullish — it rises in strong downtrends too; it has no direction.
  • Trading breakouts on a low, flat ADX, where moves tend to fade back into the range.

See also