ADX: measuring trend strength without direction

ADX — the Average Directional Index — answers one question: how strongly is this market trending, in whichever direction it happens to be going? A high ADX during a crash and a high ADX during a rally look identical. It is direction-blind on purpose.

This makes it useless as a standalone signal and unusually valuable as a filter. It tells you how much confidence the directional indicators deserve right now.

By long-standing convention, ADX below 20 indicates no meaningful trend — a ranging, directionless market. Between 20 and 25 is a grey zone, above 25 is generally read as a genuine trend, and above 40 as a strong one.

The 20 threshold is inherited, not derived. It is used here because it is the number the literature and most charting platforms use, and inventing a different cutoff without backtest evidence would be false precision.

In a range, oscillators fire constantly. RSI swings between extremes, moving averages cross back and forth, SAR flips every couple of weeks. Each of those signals looks exactly as confident as it would during a genuine trend, and collectively they are close to noise.

That is the specific failure mode this site guards against: when ADX reads below 20, the final composite score is multiplied by 0.5. The signal is not suppressed — it is stated with less conviction, and the analysis pages say so explicitly rather than hiding the adjustment.