Technical Indicators: Using ADX To Determine The Strength Of The Trend
Explanation of ADX (Average Directional Index)
* +DI line indicative of how strong the buyers are and the -DI line indicative of how strong sellers are.
* ADX above 40 (some use other lower numbers) and raising ==> Strong Upward Trend.
* ADX below 20 ==> Ranging Market.
* +DI line above -DI line, buyer is in control.
* -DI line above +DI line, seller is in control.
* Do not use trend trading strategy when the ADX is below both the +DI and -DI lines.
