Average Directional Index (ADX)
What Does Average Directional Index (ADX) Mean?
The Average Directional Movement Index is used in technical analysis as an objective value for the strength of trend; it is nondirectional so that it will quantify trend strength whether it is up or down. ADX usually is plotted in a chart window along with two lines to create one indicator; it is derived from the relationship of the lines.
Investopedia explains Average Directional Index (ADX)
This analysis is a method of evaluating trend and can help traders identify the strongest trends and show them how to let profits run when the trend is strong.
Related Terms:
• Benchmark
• Downtrend
• Index
• Trend Analysis
• Uptrend
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