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ADX is a technical indicator that measures the strength of a trend, not its direction. Plotted on a 0 to 100 scale, usually over 14 periods, it rises as a trend gains strength and falls as it weakens. It is often shown alongside two directional lines, +DI and -DI, which indicate whether buyers or sellers dominate. ADX helps traders decide whether conditions favour trend-following or range strategies.

A reading above 25 generally signals a trending market strong enough for trend-following strategies, with higher values, above 40 or 50, indicating a very strong trend. Below 25 suggests a weak trend or ranging market where trend signals are unreliable and range strategies may suit better. A rising ADX means the trend is strengthening; a falling ADX means it is weakening, regardless of direction.

The +DI and −DI lines are directional components used with the ADX indicator. +DI measures positive directional movement, while −DI measures negative directional movement. When +DI is above −DI, upward directional movement is stronger; when −DI is above +DI, downward directional movement is stronger. Crossovers between the two lines can provide potential trading signals, but they are generally more useful when supported by ADX and broader price or trend analysis.

No. ADX measures trend strength, not direction, so a high ADX can occur during both strong uptrends and strong downtrends. To assess direction, traders can look at the +DI and −DI lines or use other tools such as moving averages. A common approach is to use the DI lines to assess directional movement and ADX to determine whether the trend is strong enough to support a trend-following strategy, helping filter out weak or choppy market conditions.

Traders often use ADX as a trend-strength filter rather than as a standalone entry signal. When ADX is above 25 and rising, traders may favour trend-following setups in the direction indicated by the +DI and −DI lines, provided price action supports the setup. When ADX is below 25, traders may avoid trend-following strategies and consider whether range-bound conditions are more appropriate. Because ADX is lagging and can produce misleading signals when used alone, it is generally combined with price action and other indicators, with appropriate risk management when trading leveraged CFDs.

They measure different things and complement each other. ADX gauges how strong a trend is, helping you decide whether to trend-trade or not, but it does not show overbought or oversold levels. RSI measures momentum and flags overbought or oversold conditions but not trend strength. Used together, ADX can confirm whether an RSI signal is occurring within a strong trend or a weak, range-bound market.