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Using Bollinger Bands on ADX to Track Trend Strength

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Summary

This indicator combines Wilder’s Average Directional Index with Bollinger Bands calculated around the ADX line. It displays ADX alongside the positive and negative directional indicators, using the bands to show whether measured trend strength is high or low relative to its recent range. Users can adjust the ADX period, band period, and deviation.

The suggested interpretation is that ADX above the middle band, especially a move above the upper band, may reflect strengthening trend momentum; a drop below the middle band may point to weakening strength or a ranging market. The description proposes using price action or other indicators for confirmation and says the tool can be applied across markets and timeframes. It provides no tested results or performance evidence, so band crossings are signals to investigate rather than proof of continuation or exhaustion.

Key ideas

  • Bollinger Bands are applied to the ADX line to contextualize changes in trend strength.
  • The indicator includes Wilder ADX and the positive and negative directional indicators.
  • A move above the middle or upper band may indicate strengthening trend strength.
  • A decline below the middle band may suggest weakening trend strength or a ranging market.
  • The description gives no backtest or evidence that the suggested readings predict profitable trades.

Tags

Technical indicatorsTrend followingVolatility

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.