Knowledge center · Technical analysis
ADX (14)
Average Directional Index — measures how strongly price is trending, regardless of direction.
Formula
Wilder-smoothed ratio of directional movement (+DM/−DM) to true range; +DI/−DI give the direction, ADX the strength.
Interpretation
ADX above ~25 means a real trend is in force (read +DI vs −DI for its direction); below 20 the market is range-bound and trend-following signals degrade.
What good looks like
ADX > 25 with +DI leading — trend-following entries have the wind at their back.
What bad looks like
ADX > 25 with −DI leading, or trend signals taken while ADX < 20.
Typical range
0–100 in theory; readings above 40 are strong, above 60 rare.
Limitations
Lags at turning points and says nothing about direction by itself.
How OmniSignal uses it
It answers the first question of technical analysis — is there even a trend to follow? — before any directional signal is trusted.
Where it enters the score
Not a scoring input — used to classify the trend regime shown above.
References
Wilder (1978)
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