Is ADX a Leading or Lagging Stock Indices Indicator?

Is ADX Indicator a Leading or Lagging Indicator?

ADX indicator is a lagging technical indicator because ADX indicator is used to confirm the trend after the trend has already formed.

ADX indicator is used to confirm an upwards trend or a downward trend.

ADX values of above 20 are used to confirm a trend and ADX values of above 30 signals a strong trend either upwards or downwards.

Traders combine the ADX indicator with the DMI indicator of +DI and -DI - this DMI indicator is used to show the direction of the trend.

Upward Stock Indices Trend

When the +DI is above -DI this indicators an upward trend

Downward Indices Trend

When the -DI is above +DI this indicators a downward trend

After determining the trend of the market the ADX indicator will then be used to confirm the trend once the ADX indicator value goes above 20.

Once a trend is formed the ADX indicator will keep going up as long as the trend keeps gaining momentum.

ADX indicator value should remain above 20 and this is a signal that the current trend is holding.

Once the ADX values go below 20 - this might be interpreted as a signal that the current trend is losing momentum and the current indices might reverse if the ADX indicator value remain below 20.

ADX indicator can also be combined with other buy and sell indicators such as RSI and MACD - and signals generated by the ADX indicator can be confirmed using these additional indicators.

Is ADX a Leading or Lagging Stock Indices Indicator? - Is ADX a Leading or Lagging Stock Indices Indicator? Is ADX Indicator a Leading or Lagging Indicator