The Wind Check: The Strength That Shaped the Trade
- A Hill Station Pause
- Measuring Strength, Not Direction
- The Numbers That Influence Behavior
- Letting the Wind Decide
A Hill Station Pause
The road to Ooty was wrapped in mist. Tea gardens rolled past the car windows, and the air felt sharp and clean. A group of friends had stopped at a small viewpoint café, waiting for fresh tea to boil.
Manoj, who ran a small export business, leaned against the railing watching the clouds move fast across the hills. Priya, his wife, adjusted her shawl. Kiran, their longtime friend and an amateur marathon runner, stretched his legs. And Anand, Priya’s elder brother, who worked as a market strategist, quietly stirred his tea.
Manoj broke the silence. “This place looks calm, but the wind is wild. One moment it’s still, next moment it almost knocks you back.”
Kiran laughed. “That’s like markets. Calm for days, then suddenly rough.”
Anand looked up. “Exactly. And many traders don’t struggle because of direction alone. They struggle because they don’t know whether a move has real strength.”
Manoj turned. “Strength?”
Anand nodded. “Direction without strength is often noise. There’s a tool that helps assess strength clearly. It’s called ADX, the Average Directional Index.”
The fog thickened, and suddenly everyone was listening.
Measuring Strength, Not Direction
They moved inside the café as the wind picked up. Anand spoke slowly, keeping things simple.
“Most indicators focus on direction. ADX does something different. It helps indicate whether the market is trending strongly or moving sideways.”
Priya asked, “So it doesn’t tell direction?”
“No, ADX measures strength. Direction comes from two related lines that move with it. Together, they’re known as the Directional Movement System.”
“There are three lines. One is ADX. The other two are called +DI and -DI. +DI reflects upward pressure. -DI reflects downward pressure.”
Manoj nodded. “And how are they worked out?”
“The system compares today’s highs and lows with yesterday’s. If upward movement is stronger, +DI rises. If downward movement is stronger, -DI rises.”
“ADX is derived from the difference between +DI and -DI. It smooths that difference over time. The result shows how strong the movement is, not which side is winning.”
The Numbers That Influence Behavior
Kiran asked, “So how do people use this?”
“The reference levels are straightforward. When ADX is below twenty, the market often lacks direction. That’s where overtrading can happen.”
Manoj raised his eyebrows. “That sounds familiar.”
Anand nodded. “When ADX moves above twenty-five, it suggests that trend strength may be increasing. Above thirty indicates stronger momentum.”
“ADX > 25: Strong Trend
ADX < 20-25: Weak Trend or Range-bound Market
+DI > -DI: Bullish Trend strength
-DI > +DI: Bearish Trend strength”
Priya asked, “And entries or exits?”
“Some traders observe crosses between +DI and -DI when ADX is rising. For example, +DI moving above -DI with a rising ADX can reflect strengthening upward pressure.”
“If +DI crosses but ADX remains low, the move may lack follow-through. ADX rising acts as a filter.”
Manoj leaned back. “So ADX helps avoid weak phases.”
“Yes, It helps distinguish between active and quiet conditions. Strong trends often reward patience. Sideways markets can be challenging.”
“One more thing,” Anand added. “When ADX starts falling after being high, it can suggest that momentum is easing. It’s not a reversal signal, just a sign to stay alert.”
Letting the Wind Decide
Outside, the wind slowed. The fog lifted slightly, revealing layers of green hills.
Manoj looked thoughtful. “This explains a lot. I reacted whenever price moved, without checking if the move had force behind it.”
Anand smiled. “Markets are like this hill wind. Direction matters more when the wind has strength.”
Kiran laughed. “So no running when there’s barely a breeze.”
Anand nodded. “Exactly.”
Priya said softly, “This already feels calmer.”
Anand added, “When practicing or learning, platforms like the Navia All In One App can help keep charts clear and organized.”
As they finished their tea and prepared to leave, Manoj took one last look at the hills. He didn’t need to predict the wind. He only needed to understand its strength.
And from that moment, he knew his approach would slow down, focus more, and act only when conditions felt meaningful.
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DISCLAIMER: This story is a fictional illustration created for educational purposes. Investment in securities market are subject to market risks, read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory. Brokerage will not exceed the SEBI prescribed limit. Full disclaimer: https://bit.ly/naviadisclaimer
