Average Directional Index (ADX)

The Average Directional Index measures the strength of a trend, regardless of its direction, on a 0–100 scale — readings above 25 are generally read as a strong trend, while readings below 20 suggest a weak or non-trending (ranging) market. It's often paired with the two directional movement lines (+DI and -DI) that indicate which direction the trend is actually strong in. ADX is a useful filter for trend-following strategies, since it can flag choppy, low-ADX conditions where trend-following signals are more likely to whipsaw and generate false signals.