Trenddraws in its own pane

+DI over −DI says which way; ADX says whether it's worth calling a trend at all. Under 20 is rangebound, over 25 is trending.

On this chart: 14 periods, Wilder smoothing, guides at 20 and 25.

Wilder's Directional Movement system splits each bar's range extension into upward movement (+DI) and downward movement (−DI), each normalized by true range. ADX then measures how one-sided the two have been — trend strength with no direction of its own.

The chart uses Wilder's own smoothing, which matters: it behaves like an EMA of roughly double the length, and the 20/25 thresholds people quote only hold with it.

ADX under 20 (dashed guide on the pane): rangebound — direction signals from any indicator are suspect here. Over 25: a trend worth the name is in force, in whichever direction +DI/−DI says. A falling ADX from a high level marks a trend maturing, not necessarily reversing.

ADX answers the question every strike decision quietly assumes: is there a trend to respect? Support-based put strikes behave differently under ADX 15 (range edges tend to hold) than under ADX 35 with −DI on top (levels give way). The reading describes which of those worlds the chart is in.

Like everything in this guide, these are descriptions of conditions and reference levels — context for your own decisions, not instructions to trade.