When trading, knowing whether a trend exists is often more important than knowing its direction.
That’s where ADX (Average Directional Index) shines! 🌟
Developed by Welles Wilder, the ADX helps traders measure the strength of a trend — whether bullish or bearish.
📏 How to Read ADX?
| ADX Value | Trend Strength |
|---|---|
| 0 – 20 | No trend / Sideways |
| 20 – 40 | Moderate trend |
| 40 – 60 | Strong trend |
| 60+ | Overheated / Reversal possible |
The higher the ADX, the stronger the trend.
➕ What About +DI and -DI?
ADX usually comes with two helper lines:
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+DI = Positive Directional Indicator (bullish signal)
-
-DI = Negative Directional Indicator (bearish signal)
How to use them together:
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If +DI > -DI and ADX is rising above 20 → Trend up! Go long!
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If -DI > +DI and ADX is rising above 20 → Trend down! Go short!
🚀 Lazy Trading Strategy with ADX
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ADX < 20 – Stay out, market is sleepy 😴
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ADX crossing above 20 – Trend may be starting!
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ADX > 40 – Strong trend, ride it and trail stop loss!
🧠 Why Use ADX?
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Helps avoid choppy or sideways markets
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Identifies trend strength, not just direction
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Pairs well with RSI, MACD, and breakout strategies
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Great for beginners and lazy investors looking for structure
📌 Conclusion
The ADX may not be as famous as RSI or MACD, but it's a quiet powerhouse in any trader’s toolkit.
Learn to read it, and you’ll know when to trade and when to wait — and that’s the real edge for passive income seekers like us. 💰📈
