The ADX, created by J. Welles Wilder, measures market volatility. It stays low (below 20) during non-volatile periods and rises as volatility increases. The ADX is used to anticipate the end of ranging markets and the start of trends. It generates signals when rising above a specific threshold, confirming trend strength and allowing other indicators to open or close positions. If below the threshold, no signals are sent.
Average Directional Movement (ADX)
