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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)

Related concepts

Moving averages (20/50/200)Golden / death crossMACD (12, 26, 9)RSI (14)ATR (14)