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Average Directional Index (ADX)

What is ADX?​

The Average Directional Index (ADX) is a technical indicator that measures the strength of a trend, regardless of its direction. It helps traders identify whether the market is trending strongly or moving sideways.

ADX does not indicate trend direction – it only shows how strong the current trend is.

How to Add an ADX Indicator?​

  1. Click on the "+" button in the Indicators section.
  2. Select Average Directional Index (ADX).
  3. Choose the data point to apply ADX on.
  4. Configure the Time Frame, Length, Signal Length, Offset, and Element Name.
  5. Click "Add" to save the indicator.

ADX Settings

Configurable Parameters in ADX​

1. On Data (Source Selection)​

  • ADX requires OHLC (Open-High-Low-Close) data to compute the +DI and -DI values.
  • You must select the data series (such as Candle or custom indicators) on which ADX will be calculated.
  • If no data is selected, the platform may show a validation error.

2. Time Frame​

  • Sets the resolution of the input data for ADX calculation.
  • Example: If set to 5, ADX will be calculated on 5-minute candle data.

3. Length​

  • Defines the period over which trend strength is measured.
  • Common default: 14 periods
  • A longer length smoothens the ADX line but reacts more slowly.

4. Signal Length​

  • This is used to smooth the ADX value further and often matches the length value.
  • It can be tuned to reduce noise in trend strength evaluation.

5. Offset​

  • Shifts the ADX values forward or backward in time.
  • A positive offset delays the signal; a negative offset advances it.

6. Element Name​

  • Assigns a unique name to the ADX instance.
  • Useful when multiple ADX indicators are added in the same strategy.

💡 It's good practice to rename the element based on the strategy context (e.g., _adx_14_tf5).

Use Cases for ADX​

  • Trend Strength Detection
    → Use ADX to confirm whether the market is trending strongly or not.

  • Filter for Trend-based Strategies
    → Apply a condition like ADX > 25 to execute trades only in trending markets.

  • Avoiding Ranging Markets
    → ADX < 20 can signal a sideways market where trend strategies may fail.

  • Combine with +DI and -DI
    → For more advanced usage, combine ADX with its directional indicators to understand both trend direction and strength.

Next Steps​

✅ Add ADX to your strategy
✅ Use ADX thresholds (e.g., 20/25) to filter signals
✅ Combine with price/indicator conditions to avoid false trades in weak trends