ADX as a filter: how do you use trend strength?

FTC Community TeamStaff109 views

ADX measures trend strength regardless of direction, and the classic use is a filter: only trade trend-following setups above a threshold, only fade below it. The threshold choice is the strategy.

ADX as a filter: how do you use trend strength? — moving average crossover diagram
A fast moving average crossing a slower one

What's your ADX setup?

  • the period and threshold you use
  • how it filters your entries
  • the choppy market that slipped through the filter
ADX as a filter: how do you use trend strength? — trend versus range diagram
A trending market compared with a ranging one

The moving averages guide pairs naturally with ADX thinking.

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