ADX, or Average Directional Index, is a technical indicator used in financial markets to measure the strength of a trend. It is calculated by taking the difference between two directional indicators, the positive directional indicator (+DI) and the negative directional indicator (-DI), and dividing it by the sum of the two indicators. This results in a value between 0 and 100, with higher values indicating a stronger trend. The ADX is a valuable tool for traders and investors as it helps them identify whether a market is trending or ranging, and can assist in making informed decisions about when to enter or exit a trade.