
Most traders jumping into the field of technical analysis learn about the Relative Strength Index (RSI) indicator first. Many also learn (the hard way) that “RSI overbought” is not an automatic sell.
In strong trends, RSI can stay overbought for weeks while price keeps marching higher. That’s where the Average Directional Index (ADX) — Welles Wilder’s trend-strength indicator — can save you from getting shaken out too early.