ADX (Average Directional Index)

The Average Directional Index (ADX) is a technical analysis indicator used to quantify the strength of a trend in a financial market, regardless of its direction. Ranging from 0 to 100, an ADX value below 20 generally indicates a weak trend (or a range-bound market), while a value above 25 suggests a strong trend. It is often used in conjunction with two other lines, the Plus Directional Indicator (+DI) and the Minus Directional Indicator (-DI), to determine trend direction and potential buy or sell signals. Traders commonly implement the ADX to make informed decisions about entering or exiting trades based on trend strength.

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