Average Directional Index (ADX) is a widely-used technical analysis indicator that helps traders identify the strength of a trend in the market. The ADX is calculated based on the movement of prices over a specified period of time, usually 14 days.
A high ADX value indicates a strong trend, whether it is uptrend or downtrend, while a low ADX value suggests a weak or ranging market. Traders use the ADX to confirm the presence of a trend and to determine whether to enter or exit a trade.
ADX is often used in conjunction with other technical indicators to make informed trading decisions. Some traders use ADX to filter out potential false signals from other indicators, while others use it to confirm the strength of a trend before making a trade.
Overall, ADX provides traders with a quantitative measure of the strength of a trend, helping them make more informed decisions in the cryptocurrency market.
