Technical indicators
ADX (Average Directional Index)
Definition
One line from 0 to 100 that rises when price moves strongly in either direction and falls when the move fades or price goes sideways.
Example
Say a stock slides steadily from $80 to $68 over three weeks, and ADX climbs from 18 to 35. The rising line confirms a strong trend, but that trend points down: ADX measures strength, not direction. When the stock then drifts sideways between $67 and $70, ADX gradually sinks back toward 20 as the move fades.
Hypothetical numbers, for illustration only.
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