ADX on Quotex — Trend Strength Indicator
What ADX Measures
ADX is calculated from +DI (positive directional indicator) and -DI (negative directional indicator). +DI measures upward price movement strength; -DI measures downward. ADX itself is the absolute difference between +DI and -DI, smoothed. ADX ranges 0-100: values below 20 indicate weak/no trend (ranging market); values above 25 indicate strong trend (suitable for trend-following); values above 40 indicate very strong trend; values above 60 indicate extreme trend (often nearing exhaustion).
ADX Thresholds and Implications
| ADX Reading | Market State | Strategy Recommendation |
|---|---|---|
| 0-19 | Ranging / no trend | Use range/mean-reversion strategies |
| 20-24 | Building trend | Cautious trend-following |
| 25-39 | Strong trend | Optimal for trend-following strategies |
| 40-59 | Very strong trend | Strong trend signals; consider exit signals |
| 60+ | Extreme/exhaustion | Watch for trend reversal (overextended) |
Default Settings
- ADX period — 14 (standard)
- +DI period — 14
- -DI period — 14
- Threshold for 'trending' — 25 (most common)
- Threshold for 'strong trending' — 40
Trading with ADX
ADX rarely used alone for entry signals. Better as a filter for other strategies.
- Filter 1 — Only take trend-following strategy signals when ADX > 25 (avoids ranging market whipsaws)
- Filter 2 — Avoid mean-reversion strategies when ADX > 35 (strong trend is unfavorable for fading)
- Filter 3 — Watch ADX peaking + rising +DI/-DI as trend continuation signal
- Filter 4 — Watch ADX dropping below 20 after extended trend as potential reversal zone
ADX FAQ
Does ADX direction matter?
Yes. Rising ADX = strengthening trend. Falling ADX = trend losing power. The absolute value tells you trend strength now; the direction tells you whether to expect continuation or weakening.
What ADX value indicates a 'good' trend?
ADX > 25 typically defined as 'in a trend.' ADX > 40 = strong trend. Personal threshold depends on asset and timeframe — major forex pairs typically trend at 25-40; crypto can trend at 40-70. Test what level produces clean signals on your specific assets.
Can ADX predict trend reversals?
Not directly. ADX measures strength, not direction. Extreme ADX values (>60) often coincide with trend exhaustion, but this is correlative, not predictive. Use ADX as confirmation, not prediction.
How does ADX compare to ATR?
Both measure volatility-related concepts but differently. ATR measures absolute volatility (in price units). ADX measures directional strength (0-100 scale). ATR is best for position sizing; ADX is best for strategy selection (trend vs range).
Is ADX useful on 1-minute charts?
Marginal. ADX on 1-minute is noisy due to short data window. Better on 5m-1h timeframes where its smoothing produces meaningful signals.
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