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Glossary · Indicators

Trend strength

How forceful and persistent a trend is, judged by indicators such as ADX, the slope of moving averages and the quality of price structure.

By Sky Trade editorial teamUpdated

Two markets can both be in an uptrend and behave very differently. One climbs steadily with shallow pullbacks; another lurches up, gives most of it back and lurches again. Trend strength is the attempt to tell them apart.

Traders estimate it in several ways:

  • ADX readings, where higher values suggest a stronger trend regardless of direction;
  • the slope of a moving average and how far price stays from it;
  • structure: steady higher highs and shallow pullbacks versus overlapping, choppy swings;
  • candle quality: large bodies in the trend's direction and small counter-trend candles.

Why it matters: many tools are built for one regime. Pullback entries and crossovers need a decent trend; mean-reversion trades and oscillator extremes need its absence. Knowing which regime you are in decides which tools deserve your trust.

The misunderstanding to avoid is assuming a strong trend will last for your whole expiry. Strength is measured on the past and can fade abruptly, especially near major levels or news. On OTC instruments, strong-looking stretches are features of a random path, not momentum you can lean on. See ADX explained.

Example

EUR/USD on M15: ADX at 34, price above a steeply rising EMA 50, pullbacks of 5–8 pips within 20–25-pip pushes. That is a strong trend, which still says nothing certain about the next 5 minutes.

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