Technical Indicators · ADX

Trend strength, in one number.

ADX answers a single question: how strong is the trend, irrespective of direction? It's the most-used filter in Vant8's strategy set — trend-followers refuse to enter without it, reversion strategies refuse to enter with it, and the Spot Grid scorer uses it to rank ranging pairs over trending ones.

What it measures

Strength, not direction

ADX is computed from two directional indicators (+DI and −DI) but collapses them into one trend-strength reading. Low ADX means no clear trend; high ADX means one side is consistently winning. The number above 25 is the conventional threshold for 'trending'.

ADX ≤ 20: ranging

No persistent winner between buyers and sellers. Best for grids and mean-reversion strategies.

ADX 20–25: choppy

Transitional zone. Trend strategies sit out; reversion strategies stay cautious.

ADX ≥ 25: trending

One side is consistently winning. Trend-followers can enter; reversion strategies step aside.

Computation

Wilder's directional movement, then smoothed

+DM = max(currentHigh − prevHigh, 0)
−DM = max(prevLow − currentLow, 0)
+DI = 100 × Wilder(+DM) / ATR
−DI = 100 × Wilder(−DM) / ATR
DX = 100 × |+DI − −DI| / (+DI + −DI)
ADX = Wilder-smooth(DX, period)
Standard J. Welles Wilder formulation, used here without modification.
Defaults

The thresholds we ship

Period: 14

The textbook lookback. Long enough to be stable, short enough to react to a regime change.

Trend gate: 25

Trend strategies (Momentum, MA Cross, Perp Trend) require ADX ≥ 25 before entering.

Reversion gate: 20

Mean-reversion strategies require ADX < 20 before entering — so they don't fight a real trend.

Vant8-specific

ADX collapse as an exit

On trend-following strategies, ADX is also an exit signal. If ADX falls back below the trend gate while a position is open, it means the trend that justified the entry has lost its conviction. The strategies exit on that signal rather than waiting for price to confirm the change.

Entry gate at 25

A fresh entry on Perp Trend Following or Momentum requires ADX to be at or above 25 at the close of the entry bar.

Exit gate on collapse

If ADX falls below the configured exit threshold (typically a few points under the entry gate), the strategy treats the trend as gone and closes.

Where it shows up

Strategies that consume ADX

Momentum
Filter — refuses entries when ADX says there is no real trend behind the move.
MA Cross
Filter — refuses crossovers when ADX is too low to trust the cross.
Mean Reversion
Filter — only acts in ranging markets (ADX below threshold); steps aside in strong trends.
Perp Trend Following
Entry + exit — needs a trend strong enough to follow, exits when the trend collapses.
Perp Directional
Entry filter — directional bets require ADX-confirmed conviction.
Perp Mean Reversion
Filter — same ranging-market rule as the spot version.
Spot Grid AI
Pair scoring — ranging markets (low ADX) score higher because grids work in them.
How to read it

Where ADX can mislead you

Slow to react to a new trend

By the time ADX is above 25, the trend has been building for a while. Strategies that wait for the gate sometimes miss the first leg. That's the price of refusing to fade real trends.

Doesn't tell you which way

ADX is direction-agnostic. Pair it with +DI / −DI or with another direction-aware indicator before deciding long or short.

Pick a strategy that uses ADX.

The strategies listed above are deployed from the Strategies page on your dashboard. Each one ships with sensible defaults you can tune before deployment.