Average directional index ( ADX )
Average Directional Index (ADX) is a technical analysis indicator that measures the strength of a trend. The average directional index is direction independent meaning it ignores the direction of a trend and provides an absolute value of the trend’s strength. The ADX is calculated from the ratio between the two lines of the Directional Movement Indicators (DMI). The identification of a trend and its strength is crucial in technical analysis before placing a bid.