ADX Calculator (Average Directional Index)

The Average Directional Index is part of the Directional Movement system Wilder introduced in 1978. It answers a different question from most oscillators: not which way price is going, but how strongly it is trending at all. It is built in stages from the directional movement of each bar.

The positive and negative directional movement of each bar are smoothed with Wilder's method and divided by the smoothed True Range to produce the +DI and −DI lines, expressed as percentages. The directional index (DX) is then the absolute difference between +DI and −DI divided by their sum, times 100: it is large when one direction clearly dominates and small when the two are balanced. The ADX itself is Wilder's smoothed average of DX, which is why it responds slowly and needs a longer run of bars before it settles. This calculator shows the DX step from the two DI lines; the ADX is that value averaged over time.

ADX is used to gauge trend strength so that other tools can be applied in the right context. Because it ignores direction, it is often read alongside the +DI and −DI lines, which indicate which side is in control. Wilder suggested that readings above 25 point to a trending market and readings below 20 to a weak or ranging one, with higher values indicating a stronger trend.

These thresholds are conventions, and the 14-period default is a starting point many adjust. What a given ADX level means for you is entirely your own call.

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