ADX is derived from the smoothed difference between the positive and negative directional indicators of the directional-movement-index. It runs from 0 to 100 but rarely exceeds 60 in practice.
Its distinguishing feature is that it is direction-agnostic: a strong downtrend and a strong uptrend both produce high ADX. That makes it a regime filter rather than a signal. Many traders use it to decide whether to run a trend system or a mean-reversion system.
It lags heavily. ADX only rises after a trend is well established, and it often peaks near the end of moves. A rising ADX confirms that a trend has been strong, not that it will continue, and the 25 threshold is convention rather than a tested constant.
Related: directional-movement-index, choppiness-index, trend-following, indicator-lag, trading-range