Adx Trend Strength
Quick Reference
| Property | Value |
|---|---|
| Dimension | regime |
| Category | momentum |
| Version | v1.0 |
| Output Column | adx |
ADX-like trend strength — measures directional movement intensity over a rolling window
Formula
adx(high, low, close, window)
CDM Inputs
| Column | CDM Table | Description |
|---|---|---|
high | cdm_* | CDM source table |
low | cdm_* | CDM source table |
close | cdm_* | CDM source table |
Parameters
| Parameter | Type | Default | Description |
|---|---|---|---|
window | integer | 60000 | Window for ADX estimation |
Output
Column: adx
Average Directional Index (0 to 1, higher = stronger trend)
Market Intuition & Trading Rationale
ADX (Average Directional Index) measures trend strength regardless of direction: adx(high, low, close, window). Output ranges from 0 to 1 — higher values indicate stronger trends (either up or down). ADX does NOT indicate trend direction — a strong uptrend and strong downtrend both produce high ADX. Pair with linear_regression_slope or return_momentum to determine direction. Wilder's original implementation uses smoothing that makes ADX slower to react but more stable than simple momentum measures.
Usage Cases
- Trend strength filter: Only trade directional signals when adx > 0.25 (trending). When adx < 0.20 (ranging), directional signals are unreliable — use mean-reversion strategies instead.
- Trend exhaustion: adx declining from a high level (> 0.5 → 0.3) indicates the trend is losing strength. Tighten stops, prepare for consolidation.
- Breakout anticipation: adx at multi-period lows (< 0.15) indicates an extended range-bound period — a breakout is statistically likely. Place entry orders on both sides of the range.
YAML Definition
name: adx_trend_strength
description: ADX-like trend strength — measures directional movement intensity over
a rolling window
category: momentum
dimension: regime
version: v0.9.0 (Beta)
required_inputs:
- high
- low
- close
output_column: adx
output_description: Average Directional Index (0 to 1, higher = stronger trend)
tags:
- regime
- trend
- momentum
parameters:
window:
type: integer
description: Window for ADX estimation
required: false
default: 60000
formula: adx(high, low, close, window)