The Amazing Revolutionary Stock Market Analysis that can make more money than you’ve ever made before! Experience Sahamdetektor the incredible power analisa teknikal forex sederhana tebet the Stock Picks Info for yourself. If we could determine the direction of the trend, we have a direction to trade.
However, the strength of the trend is also very important. The ADX indicator measures the strength of a trend and can help determine if a trend is strong or weak. If the ADX numbers are higher it indicates a stronger trend and lower numbers which indicate a weaker trend. If the ADX indicator is showing a lower number, the trend is weaker and a range or channel is likely to develop. Since we are always looking for good trends to trade, it is best to avoid trading stock, ETF’s or Forex Pairs with low ADX numbers. You would rather look for investments that have higher readings thus indicating a stronger trend.
I don’t pay any attention to these additional lines, when determining the strength of a trend, for this purpose we are only concerned with the main ADX number. It should be noted that the ADX indicator measures the strength of a trend not the direction of the trend either bullish or bearish. It does not tell you if the trend is up or down, it just indicates to you how strong the current trend is. If the ADX indicator is between 0 and 20 then the stock is generally in a trading range. It is likely just chopping around sideways. Big moves tend to start at about 25. If you have lower numbers, you have a trading range or the beginning of a trend.
In the MYRX chart above, notice the ADX indicator is the blue line at above 25. So how do most traders use the ADX indicator? The ADX indicator is not used to give buy or sell signals. Therefore, it is generally used along with other indicators for entry and exit signals.