Most trend indicators tell you which direction the market is moving. The ADX indicator for MT4 does something different entirely – it tells you how strong that move is, regardless of whether price is heading up or down. That distinction trips up a lot of traders when they first encounter it, but once it clicks, the ADX becomes one of the most useful tools in your charting arsenal.
The classic mistake with ADX is treating it as a directional signal – it’s not. A rising ADX during a downtrend means the selling pressure is intensifying, not that you should buy. The ADX line itself is direction-agnostic. It simply answers one question: is this market trending hard, or is it going sideways? When you combine that information with the right entry signals, you can avoid a huge number of losing trades that occur during flat, choppy conditions.
In this review, we’ll cover how the average directional index works on MT4, the best settings for different trading styles, and a practical DI crossover strategy that filters entries by trend strength.
What is the ADX Indicator?
The Average Directional Index was developed by J. Welles Wilder Jr. and introduced in his 1978 book New Concepts in Technical Trading Systems – the same book that gave us the RSI, ATR, and Parabolic SAR. Wilder was an engineer before he became a trader, and it shows in how the ADX is constructed. It’s methodical, layered, and built from components that each serve a distinct purpose.
The ADX system actually consists of three lines working together:
- ADX line – measures trend strength on a scale from 0 to 100. It doesn’t care about direction. A reading of 50 during a brutal sell-off and a reading of 50 during a raging rally mean the same thing: the trend is strong.
- +DI (Positive Directional Indicator) – tracks upward price movement. When +DI is dominant, buyers are in control.
- -DI (Negative Directional Indicator) – tracks downward price movement. When -DI is dominant, sellers are running the show.
The ADX line is actually derived from the relationship between +DI and -DI. When the gap between the two directional indicators widens, the ADX rises. When they converge, the ADX falls. It’s an elegant system – you get both trend strength and direction from a single indicator window.
How ADX Works on MT4
On MetaTrader 4, the ADX displays in a separate window beneath your price chart. You’ll see three lines: the ADX (usually a thicker or bolder line), +DI (typically green), and -DI (typically red). All three oscillate between 0 and 100.
Here’s how to read the ADX scale in practical terms:
| ADX Value | Market Condition | What It Means for Trading |
|---|---|---|
| 0-20 | Weak or absent trend | Avoid trend-following strategies. Range-bound conditions likely. |
| 20-40 | Developing trend | Trend is gaining momentum. Watch for DI crossovers as entry triggers. |
| 40-60 | Strong trend | Trend is well established. Stay with the move, trail stops. |
| 60+ | Very strong trend | Exceptionally powerful move. Rare, but profitable when caught. |
The directional lines tell you which way to trade. When +DI sits above -DI, the trend is up. When -DI sits above +DI, the trend is down. The crossover point between these two lines is where many traders look for entry signals – but only when the ADX line confirms there’s actual trend strength behind the move.
One thing to keep in mind: the ADX tends to lag slightly because it’s smoothed. It won’t spike the moment a trend begins. By the time ADX crosses above 20, the trend has already started forming. That’s acceptable – you’re trading confirmation, not prediction.
Key Features
- Non-repainting: Once a candle closes, the ADX, +DI, and -DI values are locked in permanently
- Works on all timeframes from M1 scalping charts up through monthly candles
- Built into MT4 as a standard indicator – no custom file download needed to get started
- Three-line system gives you both trend strength and direction in a single indicator window
- Customizable period setting lets you tune sensitivity for scalping, day trading, or swing trading
- Pairs well with other indicators – particularly effective as a filter alongside moving average or breakout strategies
Best Settings for ADX Indicator
The default 14-period setting is what Wilder originally recommended, and honestly, it still works well for most situations. That said, here’s how to adjust based on your style:
| Parameter | Scalping (M1-M5) | Day Trading (M15-H1) | Swing Trading (H4-D1) |
|---|---|---|---|
| ADX Period | 7 | 14 | 14-21 |
| Key Level | 20 | 20-25 | 25 |
| Applied Price | Close | Close | Close |
Scalpers sometimes drop the period to 7 to get faster readings, though this comes at the cost of more noise. For day trading and swing trading, the standard 14-period works reliably. Some swing traders bump it up to 21 for an even smoother reading, which helps filter out minor fluctuations on higher timeframes.
Recommended starting point: Stick with the default period of 14 and use 20 as your threshold level. Only tweak settings after you’ve spent real screen time watching how the indicator behaves on your preferred pairs and timeframes.
Pros and Cons
| Pros | Cons |
|---|---|
| Uniquely measures trend strength, something most indicators ignore | Lags behind price – won’t catch the very beginning of a move |
| Non-repainting and reliable for backtesting historical setups | Useless as a standalone tool – needs directional indicators or price action for entries |
| Built into MT4 with no installation required | Can stay elevated even as a trend begins to stall, leading to late exits |
| Excellent as a trade filter to avoid ranging markets | Three-line display can feel cluttered for traders who prefer clean charts |
How to Install ADX Indicator on MT4
The ADX is already built into MetaTrader 4, so there’s nothing to download or install.
Step 1: Open MT4 and select the chart you want to analyze.
Step 2: Click Insert in the top menu bar, then navigate to Indicators > Trend > Average Directional Movement Index.
Step 3: In the settings window, set your period (14 is the default). You can adjust the colors for the ADX, +DI, and -DI lines here – I’d recommend making the ADX line thicker so it stands out from the directional indicators.
Step 4: Click OK. The ADX indicator now appears in a separate window below your chart.
Step 5: To add a horizontal reference line at the 20 level (helpful for quickly spotting trend strength thresholds), go to the Levels tab in the indicator settings and add “20” as a level before clicking OK.
Tip: To save this configuration for future use, right-click the chart > Template > Save Template and name it something like “ADX Trend Strength Setup.”
Need help with the basics? Check our full guide on how to install custom indicators on MT4.
Trading Strategy Using ADX Indicator
This DI crossover strategy uses the ADX as a trend strength filter, which is really what it was designed for:
Setup: Apply the ADX indicator with the default period of 14 to your chart. Make sure +DI and -DI lines are visible.
Buy Signal:
1. +DI crosses above -DI (buyers taking control)
2. ADX is above 20 at the time of the crossover, confirming trend strength exists
3. Enter long on the close of the candle where both conditions are met
Sell Signal:
1. -DI crosses above +DI (sellers taking control)
2. ADX is above 20, confirming the move has genuine momentum behind it
3. Enter short on the close of the crossover candle
Stop Loss: Place the stop beyond the most recent swing high (for shorts) or swing low (for longs). If the swing point is too far away, use 1.5x ATR from your entry as an alternative.
Take Profit: Close the trade when the ADX starts turning down from an elevated level (suggests the trend is losing steam), or when the DI lines cross back in the opposite direction. Alternatively, target a 1:2 risk-reward ratio minimum.
The ADX filter is what makes this strategy worthwhile. Without it, DI crossovers generate a lot of garbage signals during sideways markets. By requiring ADX above 20, you’re only taking trades when the market is actually moving with purpose.
ADX vs RSI
Traders often confuse these two since they were both created by Wilder and both use a 0-100 scale. But they measure fundamentally different things:
| Feature | ADX Indicator | RSI |
|---|---|---|
| Primary Use | Measures trend strength (not direction) | Measures momentum and overbought/oversold conditions |
| Scale Meaning | Higher = stronger trend, regardless of direction | Above 70 = overbought, below 30 = oversold |
| Best Market | Trending markets (identifies when to use trend strategies) | Both trending and ranging (identifies reversals and exhaustion) |
| Signal Type | Trend strength filter + DI crossovers | Level crosses (70/30) and divergences |
| Repainting | No | No |
Verdict: These two actually complement each other well. Use the ADX to confirm a trend is worth trading, then use RSI divergence or overbought/oversold readings to fine-tune your entries and exits. Running both simultaneously gives you a more complete picture than either one alone.
Frequently Asked Questions
Is the ADX indicator free to download for MT4?
Yes. The ADX is a built-in MT4 indicator, so there’s absolutely no cost. You’ll find it under Insert > Indicators > Trend > Average Directional Movement Index. If you want an enhanced version with crossover alerts and multi-timeframe display, we offer that as a free download here on ForexOBroker.
Does the ADX indicator repaint?
No. Once a candle closes, the ADX, +DI, and -DI values for that bar are final. The current (open) candle will show a fluctuating value until it closes, which is normal behavior – but historical values never change.
What is the best ADX setting for MT4?
The default 14-period works well across most timeframes and trading styles. It’s what Wilder recommended, and decades of use have validated it. Scalpers on very short timeframes might try a 7-period for faster reactions, but 14 remains the starting point for a reason.
What ADX level indicates a strong trend?
Most traders use 25 as the dividing line between trending and non-trending markets, though 20 is also common. Readings above 40 indicate a strong trend, and anything above 60 is exceptionally strong – you won’t see those levels often, but when you do, it usually means a major move is underway.
Can I use ADX as my only indicator?
You can, but you probably shouldn’t. The ADX tells you whether to trade (is the market trending?) but the DI lines alone can produce whipsaw signals in choppy conditions. You’ll get better results pairing ADX with a moving average crossover, breakout strategy, or price action setup where the ADX acts as a confirmation filter rather than the sole signal generator.
Download Enhanced ADX Indicator for MT4 – Free
The built-in MT4 version covers the basics, but our enhanced ADX indicator adds practical features:
- DI crossover alerts – popup, email, and push notifications when +DI and -DI cross
- ADX threshold alerts – get notified when ADX crosses above your chosen trend strength level
- Multi-timeframe ADX display – view the H4 or D1 ADX reading directly on your lower timeframe chart
Platform: MT4 (Build 1000+)
File type: .ex4
File size: 14 KB
Version: 1.8
Last updated: March 2026
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Overall Rating: 4.3/5
| Category | Rating |
|---|---|
| Accuracy | 4.0/5 |
| Ease of Use | 4.2/5 |
| Features | 4.5/5 |
| Value | 4.8/5 |
Related Indicators
- Moving Average Indicator MT4 – Combine with ADX to confirm trend direction before entering crossover trades
- MACD Indicator MT4 – Another Wilder-era classic that pairs momentum with trend direction
- RSI Indicator MT4 – Use alongside ADX for a complete trend strength and momentum analysis
- Supertrend Indicator MT4 – A trend-following alternative that combines ATR with moving average logic
- See all Trend Indicators – Browse our complete trend indicator collection
- How to Install Custom Indicators on MT4
- RSI Indicator MT4
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