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ADX (Average Directional Index)

Measures trend strength regardless of direction. Values above 25 indicate strong trends.

Trend
Difficulty: intermediate
Best timeframes: 4H, 1D

How it Works

This indicator belongs to the Trend family. It is commonly used by traders to interpret market conditions and refine entries and exits. Combine it with price action, structure, and volume for robust trade setups.

  • Start on higher timeframes to understand the overall context.
  • Use ADX (Average Directional Index) alongside key support/resistance levels.
  • Avoid taking signals in isolation – look for confluence with trend and market structure.

Practical Tips

  • Trend alignment: Only take signals in the direction of the dominant trend when possible.
  • Multiple timeframes: Confirm setups using at least one higher timeframe.
  • Risk management: Always define stop loss and invalidation levels based on price structure, not just the indicator.
  • Backtest first: Test how ADX (Average Directional Index) performs on your market and timeframe before trading live.
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