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Average Directional Index (ADX) Definition
Description
A technical indicator used to quantify the strength of a trend, without indicating its direction. This measure is derived from a moving average of price range expansions within a specific timeframe. It appears as a solitary line, with values stretching from a minimum of 0 to a maximum of 100. Here’s a breakdown of each range:
0-25: Absent or weak trend; market likely non-trending or range-bound.
25-50: Strong trend; market shows significant directional strength.
50-75: Very strong trend; high likelihood of trend continuation but possible overextension.
75-100: Extremely strong, often unsustainable trend; indicative of extreme market conditions.

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