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Home » Forex Glossary » Average Directional Index ADX

Average Directional Index ADX

The ADX shows the actual strength of trends and are exemplified by two lines +DI and -DI. The relationship between these two lines indicate whether it is advantageous to buy or sell. For instance if -DI lies above +DI, the share should be sold. Also the ADX ranges from 0 to 100, the higher the reading the stronger the trend. To indicate a strong or weak trend a standard strong trend lies above 40, while a weak trend lies below 20.