The ADX indicator is designed to quantify the strength of a trend, regardless of its direction. It does this by measuring the degree of price movement within a given period. The ADX values range from 0 to 100.
The traditional setting for the ADX indicator is 14 time periods, but analysts have commonly used the ADX with settings as low as 7 or as high as 30. Lower settings will make the average directional index respond more quickly to price movement but tend to generate more false signals.
ADX below 20: The market is currently not trending. ADX crosses above 20: A new trend is emerging. ADX between 20 and 40: This is considered as a confirmation of an emerging trend. ADX above 40: The trend is very strong. ADX crosses 50: the trend is extremely strong.
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