Question: How does the ADX indicator work?

Question: How does the ADX indicator work?

Answer

It has two components. The main line of the index shows the strength of the trend - the excess of trading volumes of buyers over sellers and vice versa. If the index moves horizontally below the 20th level, the market is flat. If the index leaves the 0-20% zone towards 100%, the rate of price change increases, the trend intensifies. The index value of 50-60% indicates the imminent end of the trend. Auxiliary lines show the price direction. The greater the discrepancy between them, the higher the ADX and the stronger the trend.