A technical indicator that quantifies the strength of the markets trend. 10-15 flat market, 16-25 trading range, 26-40 trending, 41+ hypertrend.
A Welles Wilder trading system. Commonly used to determine whether a market is trending, or moving sideways. A high ADX reading indicates a trending market. A rising ADX indicates a trending market (either up or down). If the ADX reaches 40 or greater, look for a signal that indicates the trend is over. An ADX of 20 or less indicates a sideways market.
DI & ADX are used for identifying when a definable trend is present in a security/stock. That is, the DMI tells whether an stock is trending or not. The scale for the DMI is from 0-100. The Average Directional Movement Index (ADX) is a moving average of the DMI.