The Average Directional Movement Index (ADX) indicator is used to determine when the price is trending strongly.

It is considered by some as the ultimate trend indicator.

It is measured with a scale varying from 0 to 100.

When it crosses over 25, it indicates the start of a trend (whether up or down).

If the ADX is above 40 and begins to fall, it indicates a slowdown of the current trend.

It can also be used to identify ‘non-trending‘ markets.

Most technical analysts use a 14-period ADX based on the ‘closing price’.

Once a trend is identified, the ‘+DMI’ and ‘-DMI’ lines can be used to determine the direction of the trend.

If the ‘+DMI’ is above the ‘–DMI’, prices are moving up; if the +DMI is below the –DMI, this can mean that prices are moving down.

The ADX indicator can be found in the trading platform under ‘Insert -> Indicators -> Trend -> Average Directional Movement Index’.