How much should I cut my position size when ADX shows the market isn't trending?
Enter Your ADX Reading
Use the ADX value from your charting platform, typically calculated over a 14-period lookback.
Your Result
Enter your ADX reading and planned size, then click Calculate to see a suggested adjustment.
How this is calculated
ADX (Average Directional Index) measures trend strength on a 0 to 100 scale, regardless of direction. It does not tell you whether the trend is up or down, only how strong it is.
The commonly cited Wilder guideline treats readings below 20 as a weak or absent trend, 20 to 25 as a developing trend, 25 to 40 as a strong trend, and above 40 as a very strong, and often extended, trend.
The size adjustment factor applied here is a simplified, commonly used discretionary guideline, not a mathematical formula: 0.5x in a weak trend, 0.75x in a developing trend, 1.0x (your full planned size) in a strong trend, and 0.75x again once the trend looks very strong, since extended trends are more prone to a sharp reversal.
Many trend-following and breakout traders reduce size or skip new breakout entries entirely when ADX is low, since choppy, directionless conditions tend to produce more false signals.
Risk & liability disclaimer: The reduction factors used here are a simplified, commonly cited discretionary guideline, not a mathematical formula, industry standard, or rule enforced by any exchange. Adjust them to fit your own strategy and risk tolerance. Trading Habits is not a broker-dealer, registered investment adviser, or tax professional, and is not affiliated with any broker, exchange, or data provider. We do not guarantee this tool is error-free or suitable for your situation. Always verify results independently and consult a licensed professional before making any trading or financial decision. Trading involves risk of loss, and you could lose some or all of the capital you trade with.
Trend Strength Before Trend Direction
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