Understanding indicators - Part. 5: The Average Directional Movement Index (ADX)
Continuing with our series of using indicators effectively, we will cover the "Average Directional Index” this session. The ADX is an excellent indicator to determine the beginning of a trend & subsequently the end of the trend. But the ADX is an integral part of the DMI, the Directional Movement Indicator, which is a ‘trend following’ system developed by Welles Wilder. We will look at this combination of the DMI lines & ADX, which can give the trader an excellent trend following technique.
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