Forex trend indicator
June 17, by Lee Kelvin Filed under Fx Indicator Comments Riding the trend is one of the most profitable trading strategies you can have as it is a good way of producing high risk reward ratio trade and the best way to forex out the trend of the trend is indicator make use of the forex adx indicator. If you have been reading my blog, you will know that I have written an forex to help you identify the trend of the market using indicator forex trend indicators like the moving averages.
The moving averages are still a good way to tell the trend but they are unable to give you a value for the trend and this indicator where the ADX indicator comes into play. It is an indicator that is made up of a single line with value ranging from 0 to You may think that it looks like an oscillator but trend is uni-directional. If trend take a close look at the picture below, you will find that forex adx will point up when you forex in a good uptrend as well as a downtrend.
I personally use it to tell forex the market is trending or ranging. As stated in the earlier part of this post, forex ADX has a range value from 0 to When it is moving below the 25 level, it is telling you that the strength of the market is very weak. Trend usually happens at this indicator is that the market is in consolidation and will most probably be moving in a range. When the indicator moves above the 25 level, it is telling you that the trend is strengthening and the larger the value, the stronger will be the trend.
However to have a better understanding of the trend you are in, you need to combine forex direction of the indicator together trend its forex. You are in a indicator uptrend or downtrend when the ADX indicator is pointing up and moving above the 25 level Divergence: Besides using the ADX indicator for telling the strength of the forex, you can also use the divergence of this indicator to warn you of possible retracement or reversal.
If you have entered a LONG trade and you see the ADX making lower highs while the price make higher highs, this is a good time to exit your trade as a retracement or a reversal is going to occur Breakout Strength: You can also make use of this indicator to help you trade breakouts.
The problem with most breakout traders is fake out which is the false movement of the market leading trend inexperienced traders to enter a trade and then stopped them out by reversing the movement. With the ADX indicator, you will now be able to check if a breakout is valid or not. Trend you see the price breaking out of a pattern or trend line, you can immediately check your indicator to trend if it is pointing up and moving above the 25 level.
A valid breakout will be formed when the ADX indicator is pointing up and moving above the 25 level and an invalid breakout will be the opposite. I hope that you find this indicator useful for your trade and eventually integrate it into your trading plan.
If you have other uses for the ADX, indicator share with us by commenting below. I hope that this blog will eventually become the place where traders share their knowledge and everyone can learn from one another. In addition, if you feel trend this post is useful to anyone you know, do click on the retweet button above Tags: adx indicatoradx indicator explainedadx indicator formulaadx indicatorsadx technical indicatorforex adx indicatorhow to use adx indicatorwhat is adx indicator I like the ADX indicator too.
Do you have a version with an email alert that will alert you when the ADX indicator moves above the line? The problem with the indicator is it changes direction all of a sudden. Further if you tell what timeframe is best to see ADX or ADX line is same for all time frame charts trend will indicator good for many.
The movement of ADX on 15 min chart will be same indicator on 60 min chart or not. What will be the case explain There are times where indicators do not agree with each other in different time frames. However for me, I will always choose to trust the one on the higher time frame as patterns that show on higher indicator frame has more power than lower time frame. Ask Kelvin CLICK HERE to ask me about anything related to this Blog, my Course, forex signal service and Trading in general Dun Be Shy af-form af-body.
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