The ADX is properly called the Average Directional Index. This is used to measure the strength of a current trend. It has no directional bias. It simply measures the trending strength of price. When combined with the Directional Movement Index, the indicator becomes “DMI and ADX”.

The Directional Movement Index splits into a positive directional index and a negative directional index. One is known as +DI, and the other is known as –DI. The +DI measures the upwards trend strength, while –DI measures downwards trend strength. A trend strength of over 25 is strong, while trend strength under 25 is weak.

Filtering by trend helps ensure correct usage. A buy signal occurs if +DI crosses over –DI, and +DI remains above in an uptrend. A sell signal occurs if –DI crosses over +DI, and –DI remains above in a downtrend. Signals strengthen if ADX is over 25 and weakens if below.

American Markets Analysis:

• Summaries of American Economic Structure
• Performance of Major
• Imports/Exports
• Federal Reserve Mandate versus Expectations
• Performance Indexes of U.S Economy
• Economically Correlated U.S Dollar Projections
• Large Trading Fund Index Sentiment Readings
• Market Wide Earnings Versus Valuations
• Fundamental Ranking of U.S Business Sectors
• Best and Worst Future Consensus Estimates
• Occasional: Firm Fundamental Strength Report
• List of Technicals to Look for While Trading