TRADING OF FOREX MARKET WITH ADX INDICATOR
Today I am going to teach you forex trend indicator in which you will learn about adx indicator.
And it is completely strength indicator even currency pair’s trend may be up as well as down direction.
Adx itself, not the directional indicator it only tells you the strength of up and down direction.
VALUES OF ADX INDICATOR
Now I am going to tell you values of adx indicator by which you will understand the strength of up and down direction so let’s know what they are.
keep in mind that you should not only consider the direction of adx up or down.
But also adx values and strength because someone think that adx direction up so it means trend will go upside and vice versa.
It only tells you direction with help of +DI and -DI.
when you use adx indicator you must draw the horizontal line of 30 value of adx on the chart for knowing strength and crossing that 30 line for moving trend direction with strength.
May be a question arises in your mind that why I am telling you to draw 30 line value of adx on the chart. because 30 adx value is tested to trade by after.
Very simple answer when adx cross 30 line of which I have drawn on adx indicator then decide to trade.
DI – LINE CROSSOVER
+DI line to cross above –DI Line this is an indication for buyers taking control of the market (BUY).
Well, when you see such above situation +DI line to cross above -DI line.
This is a chance of going buying but you also consider adx value that must be more above 30.
When +DI line to cross below – DI Line this is the indication for sellers taking control of the market (SELL).
Well, when you see such above situation +DI line to cross below -DI line.
This is the chance of going selling but you also consider adx value that must be more above 30.
ADX TREND, RANGE, AVOID AND NEW TREND Trend
Adx below 20 is ranging market and above 40 is trending market. When adx line is below +DI & -DI then not to trade or avoid for trade.
When adx line is above +DI & -DI and turn above 20 then it starts new trend.
So adx line above 40 and above both lines +DI & -DI then it break 40 and come down both lines +DI & -DI then we go for reversal for down.