ADX (Trend Strength)

Average Directional Index (ADX) quantifies the strength of a trend. It is non-directional - a strong downtrend and strong uptrend both have high ADX.

How it Works

• ADX < 20: The market is "dead" or ranging sideways. Perfect for Grids.
• ADX > 30: A strong trend is established. Danger for Grids.

Formula

The standard Wilder's ADX calculation is used over 14 periods.

Score Logic:
ADX < 20  →  +3 Score (Safe Zone)
ADX 20-30 →   0 Score (Neutral)
ADX > 30  →  -4 Score (Danger Zone)

Recommended Settings

• Period: 14

Q&A

Q: My ADX is 45 but the market is falling. Why is it Danger?
A: A falling market is a Trend. Grids buy as price falls. If the trend is strong (ADX 45), price will keep falling without pulling back, blowing the account.

Q: Can I optimize this?
A: For scalping, keep the threshold at 30. For long-term swing trading, you might raise it to 40.