ADX Indicator in Forex: How to Read Trend Strength, +DI and -DI

Short answer: The ADX (Average Directional Index) measures how strong a trend is on a 0 to 100 scale. It does not say whether the trend is up or down. Most platforms start with a 14-period setting. Many traders read a value below about 20 as a weak trend or a range and above about 25 as a trend, but these are conventions, not rules. The ADX lags, so it confirms rather than predicts.

ADX with +DI and -DI. Illustration, October 2026.

What the ADX shows

The indicator was introduced by J. Welles Wilder, who also created the RSI and the ATR. It sits in a separate pane under the chart and draws three lines:

Line	What it measures	Typical colour
ADX	Trend strength, with no direction	Often black or white
+DI	Upward movement	Often green
-DI	Downward movement	Often red

A single price chart cannot tell you if a move is a strong trend or just a big move. The ADX tries to answer that part. A steady climb in small steps can give a higher ADX than one huge candle followed by silence.

How to read the lines

1. ADX level. A low value suggests no clear trend. A high value suggests a strong trend.
2. ADX slope. A rising ADX says the trend is strengthening. A falling ADX says it is weakening, even if price is still moving the same way.
3. +DI versus -DI. The line on top shows which direction dominates. When +DI crosses above -DI, upward movement has overtaken downward movement.

Direction and strength are separate. The ADX can be at 35 and falling while price is still rising: the trend is losing strength, not reversing.

Reading	Many traders interpret it as
ADX under about 20	Weak trend or range. Trend-following setups are less suited
ADX above about 25	A trend is present. Trend setups are worth considering
ADX rising, +DI above -DI	Uptrend strengthening
ADX rising, -DI above +DI	Downtrend strengthening
ADX falling from a high	Trend losing strength; a pause or a range may follow

The 20 and 25 levels are widely used but not fixed. A pair that trends gently may have a different typical range than a volatile one, so look at the history of your own chart.

Worked example

Invented numbers to show the logic. On a EUR/USD 4-hour chart, the ADX sits at 16 for several days while price moves between 1.0800 and 1.0860. That looks like a range market, and a trend strategy would give frequent false signals.

Then price closes above 1.0860, the ADX climbs from 16 to 28 over six candles, and +DI is above -DI. A trader who follows trend trading basics might take that as a reason to look for a pullback entry. The same trader would still place a stop loss, because a rising ADX does not stop a reversal. If the ADX then falls from 38 to 30 while price stalls, the trader may tighten the stop or reduce the size.

Using the ADX with other tools

• Filter for a trend system. Take moving average crossovers only when the ADX is above your threshold. This removes some false signals in a range. It also removes some good trades, so test both versions.
• Pair with price levels. The ADX says nothing about where to enter or exit. Use support and resistance for that.
• Use ATR for the stop. The ATR measures volatility in pips, which the ADX does not. Then size the trade with position sizing.

Where the ADX misleads

• It lags. It is an average of past data, so it turns after price has turned. A high ADX can persist while a trend is already ending.
• A high ADX is not a buy or sell signal. It says the trend is strong, not that it will continue.
• A sharp spike. A news-driven jump can raise the ADX quickly, and the trend may be over when you see the reading. See the economic calendar.
• The period changes everything. A shorter period reacts faster and produces more false readings. A longer one is smoother and later. Change it only after testing on past charts.
• Crossovers in a range. +DI and -DI cross constantly when there is no trend. A cross with a low ADX carries little meaning.

Bottom line

The ADX tells you how strong a trend is, not where it is going. Use it as a filter that helps you separate trending conditions from ranges, read +DI and -DI for direction, and remember that it lags. No ADX reading removes the need for a stop loss and a position size built from it. Only risk money you can afford to lose. CFDs are complex, high-risk instruments.