ADX DI Trading Guide

The ADX / DI indicator is designed to automatically detect both the strength of a market trend and its current direction. By combining the Average Directional Index (ADX) to measure trend power, and the Directional Indicators (DI+ and DI-) to define trend bias, traders can effectively filter out choppy, sideways markets from highly profitable trending environments.

What does the indicator show?

• ADX Line: A line that indicates the absolute strength of the trend, regardless of whether it is moving up or down.
• DI+ Line: A line representing bullish directional momentum (buying pressure).
• DI- Line: A line representing bearish directional momentum (selling pressure).
• Threshold Line: A horizontal marker (often set at 20 or 25) acting as a baseline to distinguish between a ranging market and an actively trending market.

Key Settings

• Length: The primary lookback period used to average the True Range and directional movement calculations.
• Threshold: The predefined value that the ADX line must exceed to confirm a strong, valid trend.

How to use Strategy Parameters (Condition Source)

Within the Strategy Tester module, you can leverage the data from this indicator to create powerful logical conditions for trade entries and exits.

1. Trend Strength Metrics

Numerical values and logical comparisons assessing trend acceleration.

• adx — The raw numeric value of the trend strength.
• adx_vs_threshold — A relative state evaluating whether the ADX is active above or below the set threshold.
• adx_rising — Tracks whether the ADX line is currently moving upwards, signaling growing momentum.

2. Directional Bias & Triggers

Comparisons between buying and selling forces.

• diPlus — The absolute value of the positive directional indicator.
• diMinus — The absolute value of the negative directional indicator.
• di_cross — A precision trigger verifying when DI+ officially crosses over DI-, or vice versa.
• di_position — A continuous state denoting whether the bulls (DI+) or bears (DI-) are currently dominating.
• bullish_trend — A combined confirmed signal true only when DI+ is greater than DI-, AND the ADX is above the threshold.
• bearish_trend — A combined confirmed signal true only when DI- is greater than DI+, AND the ADX is above the threshold.

Strategy Example: If you are looking to run a trend-following Long strategy, you could add a condition: bullish_trend == true. This ensures you only enter when buyers are statistically dominant and the broader market is actively trending.