# Average Directional Index (ADX) Indicator

The ADX is an oscillator-type technical indicator that fluctuates between 0 and 100 and whose value is based on the true range of movement (TR, true range). The ADX was developed by Welles Wilder in order to obtain information about the strength of the current trend and determine if the market is in a clear trend or in a range. Additionally, the ADX also serves to inform the trader about the prevailing trend of the market through the positive/negative movement indicators (+ DI and -DI).

The ADX is the abbreviation of the name Average Directional Index. When this indicator is applied to a chart we can see three lines:
• The line + DI (Positive Directional Indicator).
• the line -DI (Negative Directional Indicator).

To understand what the indicator measures and the concept that it transmits is important to be familiar with both the TR and the ATR so I recommend you first read the article: The Average True Range

### Formula and values ​​of the ADX

As mentioned above, the ADX is an oscillator-type indicator which fluctuates between 0 and 100 although it is important to note that readings on level 60 are given rarely. The values ​​of the different lines in the ADX come from the following formulas:
• + DI (Positive Directional Indicator): This is the indicator´s line of positivi direction that measures the presence of upward movements. It is calculated from the following formula:
+ DI = + DM / TR
Where + DM is the sum of movements in a positive direction and TR is the True Range for a given period.
• -DI (Negative Directional Indicator): The – DI line measures the presence of downward movements in the market and is calculated using the following formula:
-DI =- DM / TR
Where -DM is the sum of the negative movements and TR is the True Range for a given period period of time.
• ADX (Average Directional Index): This is the line that names the indicator and it is to used to determine the strength of the trend. Its calculation derived by dividing the difference between + DI and-DI and the sum of both:
ADX = ((+ DI) – (-DI)) / ((+ DI) + (-DI))