Accountable publisher
Published under the RTX5 Editorial Team byline. It identifies the responsible publishing organization; it does not imply that a named lawyer, regulator, financial adviser, or licensed expert approved this page.
Trading indicators
ADX Indicator: Measuring Trend Strength Without Direction
The ADX indicator, or Average Directional Index, is a trend-strength measure developed by J. Welles Wilder. It runs from 0 to 100 and rises when price movement is more directional. ADX does not show whether that movement is up or down; the +DI and -DI lines give direction.
In brief
What is the ADX indicator?
ADX tells you how strong a trend is, not which way price is moving. Here is how it is built from directional movement, which thresholds are conventional, and where it misleads.
Key takeaways
- ADX measures how strong a trend is on a 0 to 100 scale. It does not say whether the trend is up or down.
- Direction comes from the +DI and -DI lines. ADX and both DI lines are built from the same directional movement inputs.
- StockCharts gives 14 periods as the default, as recommended by Wilder. It attributes the 25 level to Wilder and notes that many technical analysts use 20 as the key level.
- A falling ADX does not mean price has reversed, and a high reading does not confirm a trade.
- ADX describes past price movement. It is not a signal, a win rate or a price forecast.
What the ADX indicator measures
The ADX indicator belongs to the Directional Movement system that J. Welles Wilder set out in his 1978 book, New Concepts in Technical Trading Systems. For the wider background on how trends are read, see what is price action trading.
The name can mislead. ADX has no direction in it. It answers how strongly price has been trending over the lookback period. The +DI and -DI lines answer which side is stronger.
How ADX is built: from +DM and -DM to ADX
- 01
Step 1: directional movement (+DM and -DM)
For each bar, +DM is the current high minus the prior high, counted only when it is positive and larger than the prior low minus the current low. Otherwise +DM is zero. -DM is the mirror image: the prior low minus the current low, counted only when it is positive and larger than the upward move.
- 02
Step 2: true range (TR)
TR is the greatest of three values: the current high minus the current low, the absolute value of the current high minus the prior close, and the absolute value of the current low minus the prior close. It is the same True Range used by the average true range indicator.
- 03
Step 3: smooth, then divide to get +DI and -DI
Smooth +DM, -DM and TR over 14 periods. +DI is 100 multiplied by the smoothed +DM and divided by the smoothed TR. -DI is the same calculation using smoothed -DM.
- 04
Step 4: DX, the directional index
DX is 100 multiplied by the absolute difference between +DI and -DI, divided by the sum of +DI and -DI. It runs from 0 to 100 and is zero when the two lines are equal.
- 05
Step 5: ADX, the average of DX
ADX is a 14-period average of DX, smoothed in the Wilder way described in the next section. The result is the trend-strength line.
Wilder smoothing and the 14-period default
StockCharts states that the default period is 14, as recommended by Wilder. In the Wilder smoothing, the first smoothed TR is the sum of the first 14 TR values. Each later value is the prior smoothed value, minus the prior value divided by 14, plus the current TR. The same 14-period structure carries through to ADX.
For ADX itself, the first value is a 14-period average of DX. Each later value is ((prior ADX × 13) + current DX) ÷ 14, so each new reading carries one-fourteenth of the weight.
StockCharts also notes that roughly 150 periods of data are needed before the smoothed values settle. A chart with fewer bars shows values that depend heavily on where the calculation started, so judge early readings with care.
Worked example: DX from +DI and -DI
The example below works DX from given DI readings. Each row is arithmetic only, not market data. Both readings are positive numbers: DX = 100 × (larger reading minus smaller reading) ÷ (larger reading plus smaller reading). StockCharts writes this as the absolute difference over the sum, times 100.
| Case | +DI | -DI | Difference | Sum | DX |
|---|---|---|---|---|---|
| Example A | 30 | 10 | 20 | 40 | 50.0 |
| Example B | 25 | 20 | 5 | 45 | 11.1 |
| Example C | 10 | 10 | 0 | 20 | 0.0 |
Example arithmetic. Case A: 100 × 20 ÷ 40 = 50.0. Case B: 100 × 5 ÷ 45 = 11.1 (rounded). Case C: the two lines are equal, so DX is zero.
Case A has a wide gap between the DI lines and a DX of 50. Case C has equal lines and a DX of zero. A high DX describes the spread between the lines, not where price will go.
Next, a smoothing step. With a prior ADX of 30 and a current DX of 36: ADX = ((30 × 13) + 36) ÷ 14 = 426 ÷ 14 = 30.43, rounded to two places. One new reading moves the smoothed value only a little.
Reading ADX levels: Wilder's 20 and 25 conventions
StockCharts attributes to Wilder the view that a strong trend is present when ADX is above 25, and that no trend is present when ADX is below 20. It says there appears to be a grey zone between 20 and 25, and that many technical analysts use 20 as the key level. The source does not say how to classify readings in that band.
These are conventions for describing a trend, not buy or sell triggers. The table sets out the variants found in the references cited in this guide.
| Reference | Setting or level | What the reference says | How to read it here |
|---|---|---|---|
| StockCharts ChartSchool (Wilder) | Above 25 | A strong trend is present | Wilder's view, as cited by StockCharts |
| StockCharts ChartSchool (Wilder) | Below 20 | No trend is present | Same source |
| StockCharts ChartSchool | 20 to 25 | There appears to be a grey zone | The source does not say how to classify it |
| StockCharts ChartSchool (common practice) | 20 | Many analysts use 20 as the key level | A different cut-off from Wilder's 25 |
| StockCharts ChartSchool (default) | 14 periods | Default, as recommended by Wilder | The default period for the DI lines and ADX |
| MetaTrader 5 help: standard ADX | 14-period DI lines | Describes a 14-period comparison of +DI and -DI, with a formula as an N-period average of the normalised difference | Uses a 14-period +DI and -DI comparison; the page does not label it a default; no level is stated |
| MetaTrader 5 help: Wilder variant | Period input, no default stated | Built as a strict correspondence with Wilder's algorithm; its ATR line is smoothed with a smoothed moving average | The default must be checked on the platform |
Verified on 10 November 2026 from the StockCharts ChartSchool and MetaTrader 5 help pages listed under sources.
Reading ADX with the +DI and -DI lines
ADX gives the strength of the movement. The +DI and -DI lines give its side. When +DI sits above -DI, upward directional movement has been larger over the lookback. When -DI sits above +DI, downward movement has been larger.
MetaTrader 5 documents a crossover rule attributed to Wilder. This guide does not set out entries or exits, and no test of that rule is cited here.
A useful reading order is direction from the DI lines, strength from ADX, and then context from the price chart. For a broader view of momentum, compare with what is MACD, which answers a different question.
Common misreads of the ADX indicator
| Misread | What the indicator actually shows | Better reading |
|---|---|---|
| A rising ADX means price is going up | ADX rises when directional movement grows, whichever way price moves | Check the +DI and -DI lines for direction |
| An ADX above 25 is a buy or sell signal | It describes trend strength over the lookback period | Treat it as context, not a trigger |
| A falling ADX means the trend has reversed | A falling ADX means strength is fading or the market is flattening | Price can keep moving the same way while ADX falls |
| A low ADX means price is calm | A low ADX means little directional movement, not a small price range | Sideways markets can still have wide bars and large swings |
| Changing the period only changes the speed | The period sets the smoothing. At the 14-period default StockCharts gives, ADX = ((prior ADX × 13) + current DX) ÷ 14, so each new DX carries one-fourteenth of the weight | A different period changes every value on the chart; compare settings before choosing one |
| ADX is reliable from the first bar | Smoothed values need a long run of data to settle, around 150 periods per StockCharts | Ignore early values on a new chart or after a data gap |
Limits of the ADX indicator
- ADX is calculated from past bars. It cannot show what price will do next.
- The output depends on the period, the smoothing method and the bar data. The standard and Wilder versions on MetaTrader 5 are documented differently, so the same chart can show different values.
- The smoothed values need a long warm-up period, so short histories give unstable readings.
- A high ADX confirms that movement has been directional. It does not confirm that the move will continue or make money.
- Gaps, thin data and bad bars feed the high, low and close inputs, and they can distort the result.
Risk disclosure
- This guide is educational and is not personal financial advice. ADX describes past price movement and does not forecast price.
- No ADX reading is a buy or sell signal. This page gives no win rate, profit figure or tested strategy.
- Trading CFDs, forex and other leveraged products can lose money quickly. Read margin in trading before you use leverage.
- ADX values depend on the period, smoothing and data. Platforms and settings can show different numbers for the same chart.
- A trade based on trend strength can still lose if price reverses, gaps or moves sideways.
RTX5 status
This guide explains the ADX indicator in general and does not describe an RTX5 feature. No RTX5 release record confirms which indicators, chart types or alerts the product includes. Its Windows desktop client is in preview, and the web and mobile clients are planned. A Google Play listing for Android is published, but the mobile client has no approved release record yet; check the product-availability record before relying on any RTX5 feature.
Check RTX5 product availabilityTrust and methodology
How this research was prepared
We want you to be able to identify who owns the page, inspect the evidence, understand how tools were used, and challenge anything that looks wrong or out of date.
Evidence you can inspect
5 primary references are listed on this page with context about what each one supports. The source set was checked on .
Assistance is disclosed
Automation and AI may help organize research, outline a page, or edit language. They are not treated as sources, are not presented as human experts, and do not remove the publisher's responsibility for the final page.
Corrections are welcome
If a statement is incomplete, unsupported, or outdated, send the exact URL, sentence, and supporting evidence through our contact route. Read the full editorial and corrections policy.
Primary references
Sources were checked on 10 November 2026. They explain market rules and concepts; they do not certify RTX5 or provide individual financial advice.
StockCharts ChartSchool: Average Directional Index (ADX)Gives the +DM and -DM rules, the 14-period default recommended by Wilder, the +DI, -DI, DX and ADX formulas with Wilder smoothing, the roughly 150-period warm-up, and the 20 and 25 levels. Attributes the Directional Movement indicators to Wilder's 1978 book. Checked 10 November 2026.StockCharts ChartSchool: Average True Range (ATR)Gives the three-candidate True Range definition, attributes ATR to J. Welles Wilder, notes the 1978 book, and gives the 14-period default. Checked 10 November 2026.MetaTrader 5 Help: Average Directional Movement IndexThe standard ADX page. Gives the 14-period +DI and -DI comparison, the formula as an N-period sum of the normalised DI difference averaged over N, and a crossover rule attributed to Wilder. The page does not label 14 as a default and does not state an applied price. Checked 10 November 2026.MetaTrader 5 Help: Average Directional Movement Index WilderThe Wilder variant. Says it is built as a strict correspondence with the algorithm described by Welles Wilder, smooths the TR line (ATR) with a smoothed moving average, and takes a Period_ADX input without stating a default. Checked 10 November 2026.RTX5 product availabilityThe RTX5 status record. The ADX explanation on this page is general and is not an RTX5 feature.
Questions readers ask
Is the ADX indicator a directional indicator?
No. The ADX indicator measures how strong a trend is, on a scale from 0 to 100. Direction comes from comparing the +DI and -DI lines. Wilder's directional movement system is built from both parts, but ADX on its own does not show whether price is rising or falling.
What is the default period for ADX?
StockCharts gives 14 periods as the default, as recommended by J. Welles Wilder in New Concepts in Technical Trading Systems (1978). The MetaTrader 5 help page for the standard indicator also uses a 14-period comparison of the DI lines. Some platforms let you change the period, and a different period changes every value on the chart.
Does an ADX above 25 mean a trend will continue?
No. StockCharts attributes to Wilder the view that a strong trend is present when ADX is above 25. That describes the trend over past bars. It does not show that the trend will continue, and it is not a signal to enter or exit a trade.
Why do sources use both 20 and 25 for ADX?
StockCharts says there appears to be a grey zone between 20 and 25, notes that many technical analysts use 20 as the key level, and attributes the 25 level to Wilder as the point for a strong trend. The disagreement shows that these are conventions. Check which level your source uses before you compare readings.
Can ADX help me avoid losing trades?
No. ADX describes past price movement, and it can stay high during a trend that reverses, and it can fall after a trend has ended. It does not remove trading risk. Keep your own risk limits, and use the position size calculator to set the amount at risk before any trade.
Keep learning
Average true rangeThe volatility measure that shares its true range input with ADX.Aroon indicatorAnother trend-timing tool that measures how long ago the recent highs and lows formed.Parabolic SARA trailing stop-and-reverse indicator, also introduced by Wilder.What is MACD?A momentum indicator that answers a different question from trend strength.Position size calculatorWork out a position size from the amount you accept to lose and the stop distance.