An indicator that shows, as a number from 0 to 100, how strongly the price is moving in one direction, whether up or down.
- Weapon tier
- Standard
- Slots used
- Sub-charts 1/2
- Created by
- J. Welles Wilder Jr. · 1978
Concept
ADX does not tell you the direction. Whether the price is rising or falling, the value grows the more strongly it moves one way, and shrinks when it moves back and forth sideways.
The panel shows a single adx line with a dotted line at 25. Below 25 is often read as “no clear trend” and above 25 as “a trend has formed”.
- ADX
Charts by TradingView Lightweight Charts™
80 candles with volume and the adx line in the panel. In the first part the price moves sideways and adx stays low, below 25. Around candle 60 (yellow vertical line) the price breaks upward and adx rises above 25, then stays high for a while. Keyboard: ←/→ to move, +/− to zoom, 0 to see the whole chart.
In this chart adx rose while the price was going up, but adx rises the same way when the price falls hard. Direction has to be read separately, from the price or from DMI (+DI and −DI). Drag the chart sideways with a finger or the mouse to move it, and pinch with two fingers to zoom in. With a keyboard, click the chart, then use ←/→ to move and +/− to zoom.
How it is calculated
Compute the two DMI lines over 14 candles: +DI (the force pushing highs up) and −DI (the force pushing lows down).
Divide the difference between them by their sum and multiply by 100 (DX). If only one force is strong it is close to 100; if the two are similar it is close to 0.
ADX is DX smoothed with a 14-candle Wilder average. So it moves slowly and reacts later than the price.
Parameters
| What it sets | Name in the game | Default | Range |
|---|---|---|---|
| Candles used for +DI, −DI and the average | period | 14 | 2 – 100 |
Trading ideas
Spotting a trend start: when adx has been low for a long time and then rises above 25, it is commonly read as the sideways phase ending and a one-way move forming. The chart on this page shows that scene. Decide the direction from the price trend (lesson 2).
Choosing a strategy: some traders think range-trading indicators (oscillators) work better when adx is low, and trend-following indicators (such as moving averages) work better when it is high.
Common traps
- A high adx does not mean “rising”. adx is high during a sharp drop too.
- adx is late. By the time it crosses 25, the move may already be well under way.
- The chart on this page was chosen as a scene where the price rose after adx crossed. It does not always go that way.
In the game
- “ADX” is a “Standard” weapon and uses 1 of the “Sub-charts” panels (limit 2). Volume in the starting setup already uses 1, so adding ADX brings it to 2 (0 left).
- The panel shows the adx line and a dotted line at 25. The +DI and −DI lines are drawn by the separate “DMI” weapon.
Related indicators and lessons
- MACD — A trend indicator that uses the gap between a fast and a slow exponential moving average to show whether the two averages are pulling apart or closing in.
- Ichimoku Cloud — A trend indicator that uses five lines and a cloud to show at a glance where the price sits within its past price range.
- Pivot Line — An indicator that uses the previous candle’s high, low and close to set five reference lines (Pivot, R1, R2, S1, S2) for the current candle in advance.
- DMI — A trend indicator that shows, as two lines side by side, the force pushing highs higher (+DI) and the force pushing lows lower (−DI).
- Parabolic SAR — An indicator that uses a single trailing “stop line” to show whether the price is in a rising or a falling stretch, and when it flipped.
- Aroon — An indicator that judges whether a new trend has started by how long ago the recent high and low were made.
- Supertrend — A trend indicator that keeps a single line above or below the price and uses its color and position to show whether the price is in an uptrend or a downtrend.
- Exponential Moving Average — A line that averages recent closes with more weight on the newest ones, so it follows price changes faster than the simple moving average.
- MA Golden Cross — An event marker that puts a vertical line on the candle where the short moving average crosses up through the long one.
- MA Dead Cross — An event marker that puts a vertical line on the candle where the short moving average crosses down through the long one.
- 2. Trends and sideways moves