An indicator that measures the strength of a trend without saying anything about its direction. It answers a single question: is the market trending at all?
The Average Directional Index (ADX) was introduced by J. Welles Wilder in his 1978 book New Concepts in Technical Trading Systems — the same volume that gave us RSI and Parabolic SAR. Three of the most enduring tools of technical analysis arrived in a single year, from a single author.
What makes ADX unusual is that it is direction-agnostic. Whether the market is rising or falling, if participants are committed to a single direction, ADX rises. If they are not, ADX falls. It answers only one question — is the market trending? — and leaves the matter of which way to the two companion lines, +DI and -DI.
It is a quiet but uncomfortable indicator: it makes visible the unspoken fact that trend-following tools work only when there is a trend to follow.
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