ADX
Technical analysisAverage Directional Index — a measure of trend strength, not direction, on a 0–100 scale.
In plain terms
The indicator that tells you whether to trust your other indicators.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Choppy market
Technical analysisAlso called: Range-bound market
A market oscillating without net progress, typically with ADX below about 20.
In plain terms
Every breakout fails. Signals still fire; they simply do not follow through.
DI-
Technical analysisAlso called: −DI, Negative directional indicator
The negative directional indicator — the share of recent price range attributable to downward movement, plotted alongside ADX.
In plain terms
When it sits above DI+, whatever strength ADX is reporting belongs to a downtrend. An ADX of 45 is equally consistent with a runaway rally and a violent crash.
DI+
Technical analysisAlso called: +DI, Positive directional indicator
The positive directional indicator — the share of recent price range attributable to upward movement, plotted alongside ADX.
In plain terms
ADX gives strength and no direction whatsoever. Reading a high ADX on its own as bullish is a common and expensive error; this is where the direction comes from.
Trending market
Technical analysisA market making sustained directional progress, typically with ADX above about 25.
In plain terms
Where trend systems earn their money and mean-reversion systems get run over.