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The Average Directional Index (ADX) is a technical indicator used in financial markets to measure the strength and direction of a trend. It was developed by J. Welles Wilder and is commonly used by traders and analysts.

The ADX calculates the strength of a trend by analyzing the price movement of an asset over a specified period. It consists of three lines: the ADX line, the positive directional indicator (+DI), and the negative directional indicator (-DI).

The ADX line itself represents the strength of the trend. Higher ADX values indicate a stronger trend, while lower values suggest a weaker trend or a sideways market. A value of 20 or below typically suggests a weak trend, while a value above 40 indicates a strong trend.

The +DI and -DI lines, on the other hand, indicate the direction of the trend. The +DI line measures upward movement, while the -DI line measures downward movement. By comparing the two lines, traders can determine whether a market is trending up or down.

In addition to the ADX line and directional indicators, traders often look for crossovers and divergences among these lines to identify potential trend changes or reversals.

Overall, the ADX helps traders assess the strength and direction of a trend, which can be useful for making informed trading decisions. It is important to note that the ADX is not intended to provide buy or sell signals on its own but rather as a tool to complement other technical analysis techniques.