ADX and DMI: Measuring Trend Strength | Technical Analysis
TL;DR
ADX and DMI: Measuring Trend Strength ADX is one of the most-used — and most-misused — tools in technical analysis. In this episode we break it down for serious traders: the intuition and the math, how to read it, real entry and exit signals, an analogy that makes it click, a worked example, and the pitfalls to avoid.
“ADX and DMI: Measuring Trend Strength ADX is one of the most-used — and most-misused — tools in technical analysis. In this episode we break it down for serious traders: the intuition and the math, how to read it, real entry and exit signals, an analogy that makes it click, a worked example, and the pitfalls to avoid.”Click to post on X ▸
Where this fits in the Confluence Method
This lesson lives in the Stack step of the Confluence Method, where you confirm momentum, price action and structure and a key level before a setup qualifies as a trade.
Read the full method ▸Full transcript
2 sections0:00Welcome back. ADX and the directional movement index — the tool that tells you whether to trend-trade or stand aside. ADX measures trend strength on a zero-to-one-hundred scale, and crucially, not direction. Above twenty-five, a real trend is underway and trend-following works. Below twenty, the market is ranging and breakouts will fail. The two D M I lines, plus and minus, tell you direction: when plus is on top, buyers control; when minus leads, sellers do. ADX says how strong, D M I says which way.
0:33Only trend-trade when ADX confirms strength, and let the D M I lines pick the side. Next: Parabolic SAR.
