How To Use The ADX Indicator

The ADX indicator is a popular trend indicator and it provides information about momentum and trend strength.

As you will probably know, the ADX indicator comes with 3 lines: the general ADX line (the black line in our examples) and the two DI lines (green and red lines). We will first look at the ADX line.

Essentially, the ADX line measures trend strength and a rising ADX means that the trend is gaining strength, a falling ADX shows a trend that is losing momentum or reversing and a flat ADX shows a sideways range.

What is also important to know is that the ADX is non-directional which means that it does not give any information about the direction of the trend. When the ADX goes up, all it means is that the trend is gaining strength – this can then signal both a bullish or bearish trend.



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