Momentum indicators
Average Directional Movement Index
Directional-movement based trend-strength indicator.
- Engine
- TA-Lib
- Function
ADX- Input series
- high, low, close
- Outputs
- 1
How it works
ADX uses high, low, and close data to calculate directional movement and smooth it into a trend-strength value. It measures trend strength rather than trend direction. TA-Lib marks ADX as having an unstable period.
Use case
Use ADX as a trend-strength feature for separating directional regimes from low-directional-movement regimes.
Parameters
| Parameter | Type | Default | Bounds or options | Description |
|---|---|---|---|---|
| Time Period | integer | 14 | 2…100000 | Number of bars used for directional movement smoothing. |
Outputs
| Output | Type | Description |
|---|---|---|
| ADX | number | Average Directional Movement Index value for the bar. |
Reading the result
ADX describes directional trend strength without identifying bullish or bearish direction. A high value can occur in a strong decline as well as a strong advance.
Use it as regime context or combine it with a separate directional feature. Changes in ADX can describe strengthening or weakening trend structure even when price direction remains unchanged.
Common mistakes
- Reading a high value as bullish.
- Treating one fixed threshold as universal across symbols and timeframes.
- Confusing trend strength with expected return.
- Ignoring the longer stabilization needs of a smoothed directional-movement calculation.
DataCat workflow notes
When building categorical regimes, retain the continuous value in the dataset or downstream feature store. Threshold-only features discard information and can create unstable boundary behavior.