Technical indicator

ADX and trend strength

ADX is an indicator that measures the strength of a trend, not its direction. Two more lines that carry the direction are drawn with it: +DI and −DI. The question it asks is whether price is moving clearly in one direction or going back and forth in a directionless range.

The orange line is ADX, the green line +DI and the red line −DI. The dashed horizontal lines are the 20 and 25 thresholds. ADX rises through the trend, but only after it has started, and falls as price flattens.

Which question does ADX answer?

On a chart we can tell whether price is trending or moving sideways by looking at its highs and lows. ADX reduces this reading to a single number: it measures how consistently price has been extending in one direction recently.

ADX does not show direction. It rises in a strong uptrend and in a strong downtrend alike. Direction is read from the two directional lines ADX is calculated from: +DI shows the share of upward movement and −DI the share of downward movement. Together the three lines are called the DMI (Directional Movement Index).

How it is calculated

Find the directional movement. For each candle, up move = this candle's high − the previous high, and down move = the previous low − this candle's low. Whichever is larger, and above zero, counts (+DM or −DM); the other is set to zero.
Find the true range (TR). TR is the largest of three values: high − low, the distance from the high to the previous close, and the distance from the low to the previous close. This is also the basis of ATR.
Smooth over 14 periods and calculate +DI and −DI. +DM, −DM and TR are smoothed over 14 periods with Wilder's method. +DI = 100 × smoothed +DM / smoothed TR; −DI is calculated the same way with −DM.
Calculate DX and ADX. DX = 100 × |+DI − −DI| / (+DI + −DI). ADX is a 14-period Wilder average of DX. That is why it ranges from 0 to 100 and moves slowly.

Common readings

ADX below about 20: often read as a weak or unclear trend, a sideways market.
ADX above about 25: often read as a clear trend being in place. Which of +DI and −DI is on top shows the direction.
+DI above −DI: upward moves dominate. −DI above +DI: downward moves dominate.
ADX at very high levels: the trend is strong, but the move may also have run for a long time. A high ADX on its own does not say the trend will continue.

The 20 and 25 thresholds are widely used conventions, not rules. Different sources use different thresholds, and settings other than 14 periods can be chosen. The default setting is ADX/DMI 14.

Rising and falling ADX

The direction of ADX is read as well as its level. Two ADX readings at the same level can tell different stories.

ADX rising

Price is extending more and more consistently in one direction. This can be up or down; the DI lines show which.

ADX falling

The trend is losing strength or price is turning sideways. A falling ADX does not mean the trend is reversing, only that it is becoming less consistent.

ADX low and flat

Price moves back and forth with no clear direction. The DI lines may cross each other often; crossings say little in this setting.

What it shows, what it does not prove

What it shows

How consistently price has been extending in one direction recently
Through +DI and −DI, whether upward or downward moves dominate
Which side of trend versus sideways the market is closer to

What it does not prove

That the trend will continue, or how long it will last
That a trend has started, in good time; because of two stages of smoothing ADX lags price
That a falling ADX means a reversal; it only shows strength fading

The MarketLevelMap view

How it relates to zones

ADX gives a hint about the context in which a support or resistance zone is read. In a sideways market with a low ADX, price often moves between the zones at the edges of the range; reactions at zones are more usual in that setting.

In a trend moving with a rising ADX, price may be more inclined to move beyond zones. Even so, a breakout is measured not by ADX but by a close beyond the far edge of the zone, read as a band. Because ADX lags, a move out of a zone often shows in price before ADX rises.

Often confused with

For general information only. Not investment advice.Last updated: 23 October 2026