Average Directional IndexADX
The Average Directional Index (ADX) measures the strength of a trend, not its direction; readings above about 25 are commonly read as a strong trend.
The Average Directional Index tells you how strong a trend is, not which way it is going. Traders use it to decide whether trend-following or range tools suit the current market.
- Category
- Indicators and Tools
- Reading time
- 3 min
- Also called
- Directional Movement System, DMI with ADX
- Updated
ADX in plain words
ADX comes from Welles Wilder's directional movement system and tells you how strong a trend is, without saying which way it is heading.1
Direction comes from the two companion lines: +DI above −DI points to an uptrend, and +DI below −DI points to a downtrend.1
So ADX answers “how strong?”, while the DI lines answer “which way?”.
How ADX is calculated and read
Choose the period
StockCharts uses a 14-period setting, as recommended by Wilder.1
Compute +DI and -DI
Smooth plus and minus directional movement and divide by smoothed true range.
Compute DX
Compute DX: take the gap between +DI14 and −DI14 (ignoring the sign) and divide it by their sum.1
Smooth into ADX
Start ADX as the plain 14-period average of DX, then smooth it from there.1
Read the level
Wilder suggests a strong trend above 25 and no trend below 20.1
Read the slope
A rising ADX line generally means an existing trend is strengthening.2
Worked examples
Example 1 — Strong trend
Strong uptrendA hypothetical stock shows ADX 32, with +DI above -DI.
| ADX | 32 |
| +DI vs -DI | +DI higher |
Above 25 signals a strong trend per Wilder, and +DI above -DI points up.1
Example 2 — No trend
RangeA hypothetical currency pair shows ADX 15.
| ADX | 15 |
Below 20 suggests no trend is present, so range tactics may suit better.1
Example 3 — Lagging signal
LagA hypothetical index reverses sharply but ADX stays near 28 for days.
| ADX | 28 |
| Price | Reversed |
All that smoothing makes ADX slow to react, so it can still look strong after the trend has turned.1
ADX vs RSI
| Aspect | ADX | RSI |
|---|---|---|
| Measures | Trend strength | Momentum and overbought/oversold |
| Direction | No | Yes |
| Range | 0–100 | 0–100 |
| Best for | Choosing trend or range tactics | Timing entries |
Where ADX is used
Strategy filter
Choose Trend Following or Mean Reversion tactics.
Trend confirmation
Check a Breakout has strength behind it.
Pair with DI lines
Combine with Moving Average direction.
Volatility context
Use alongside Average True Range.
Advantages and disadvantages
Advantages
- Separates strength from direction.
- Works on any timeframe.
- Clear reference levels.
- Helps choose a strategy type.
Disadvantages
- Lags due to heavy smoothing.
- No direction on its own.
- Needs long data history.
- Thresholds vary by market.
Going deeper
Read as far as you need. Each level builds on the one before it.
Strength only
Beginner
Because ADX ignores direction, a steady sell-off can produce a high reading just like a strong rally.1
Trend systems
Intermediate
A high ADX favours trend-following tools such as moving averages and channel breakouts, since strong trends are where they work best.2
Data needs
Advanced
Wilder's smoothing needs a long history — roughly 150 periods — before ADX settles, and readings above 60 are rare.2
Common mistakes
Reading ADX as direction
Use +DI and -DI for direction.
Treating 25 as magic
Adjust for the market.
Ignoring lag
ADX can stay high after a reversal.
Using short histories
Values settle only with enough data.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- ADX measures trend strength, not direction.
- Above about 25 often means a strong trend.
- Below 20 often means no trend.
- +DI and -DI give direction.
- Smoothing makes ADX lag.
Frequently asked questions
Can ADX show direction?
What period is standard?
Is a high ADX bullish?
Further learning
- Average True Range
Wilder’s volatility measure.
- Trend
What ADX measures.
- Trend Following
Strategies ADX filters.
- Relative Strength Index
Another Wilder indicator.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- StockCharts ChartSchool. Average Directional Index (ADX) (opens in a new tab) Checked .
- Fidelity. Average directional index: ADX (opens in a new tab) Checked .
Read more elsewhere
- Trading Metrics (our sister site): Average Directional Index (ADX) (opens in a new tab)
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. Trading Metrics is our sister site, under the same ownership; we are not affiliated with any other publisher linked above. Last reviewed . Report an error or request a source credit.