Table of Contents

Forex - Indicators - ADX (Average Directional Index)

A Trend Strength Indicator, how strong a trend is.

The indicator is based on a moving average of price range expansion over a given period of time.


Comprises three lines:


Buy

A Buy signal (in an uptrend) is generated when +DI rises above -DI.


Sell

A Sell signal (in a downtrend) is generated when -DI rises above +DI.


Both signals are valid only if the ADX itself is rising, which indicates the presence of a trend.

And if the ADX is falling, it's time to think about profit-taking.