Key Features:

• ADX and ADI Line (Blue): Shows the smoothed strength of the current trend, regardless of direction.
• +DI Line (Green): Indicates the strength of upward movements.
• -DI Line (Red): Indicates the strength of downward movements.
• Threshold Line (Gray): A horizontal reference level (default 25) to help identify whether the trend strength is significant.

How It Works:

1. The indicator calculates True Range (TR), Positive Directional Movement (+DM), and Negative Directional Movement (-DM).
2. It applies Wilder’s smoothing technique to compute the smoothed values of TR, +DM, and -DM.
3. From these, the Directional Indicators (+DI and -DI) are derived, showing which side (bullish or bearish) has stronger momentum.
4. The DX (Directional Index) is calculated from the relative difference between +DI and -DI.
5. Finally, the ADX (Average Directional Index) is computed as a smoothed version of DX, providing a measure of overall trend strength.

Interpretation:

• When ADX is above the threshold (e.g., 25), the market is considered to be trending strongly.
• When +DI > -DI, bulls are in control (uptrend).
• When -DI > +DI, bears are in control (downtrend).
• When ADX is below the threshold, the market is considered to be ranging (weak or no trend).