ADX - Average Directional Index

The ADX is a great tool for options traders to help you understand the strength of a trend and filter out strategies. In this video, we explain what the ADX is and how you can use it.

The ADX (Average Directional Index) is a non-directional trend strength indicator, which attempts to use a sophisticated algorithm to quantify trend strength in bullish and bearish markets.

In this video, we explain what the ADX is, how traders use the ADX and how it is calculated.

After watching this video, you should be able to understand what makes up the ADX, how to use it to make better trading decisions and how to draw it in your charting software to reduce the noise that it generates.

Video Contents

• What is the ADX?
• How to use the ADX?
• Why is the ADX useful?
• How is the ADX calculated?
• Drawing the ADX with Implied Volatility charting