Average Directional Index - ADX measures the strength of a prevailing trend by comparing two indicators created by Welles Wilder: a positive directional indicator (+DI) and a negative directional indicator (-DI). ADX combines and smoothes the two into an exponential moving average. Though it does not provide an indication of direction, it is an excellent way to confirm the strength of a trend. Depending on the market, a reading less than 20-25 generally indicates a low or non-trending environment.
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