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I have said in my previous articles that “Trend is our friend”. However, If you really want to make some good bucks with trading with the trend. You need to identify the strength of that trend. Therefore, In this article, I will be discussing one of the efficient indicators i.e ADX. This indicator will surely help you to find the strength of the trend.
What is ADX Indicator?
ADX or the Average directional movement index was developed in 1978 by J. Welles Wilder. This Indicator is a trend indicator that helps us to identify the current strength of the trend by oscillating between 0 -100. This Indicator can be used in both the trending and Range bound markets.
This Indicator uses the three most important lines ADX line, +DI line, – DI line to verify the trend. The crossover of +DI and -DI creates buying and selling opportunities.
How to configure ADX Indicator at Pocket Option
Setting up the indicator is quite simple. Login to your account first. Click on the indicator at the top of the page.
Change the colour and darken the line for visibility. You can also change the ADX value. However, This Indicator works best with default settings.
How to Trade with ADX Indicator?
Trading with the indicator is not all difficult. You can easily trade via the same. You just need to focus on the crossovers of +DI and -DI lines. and the positioning of the ADX line.
Make Buy Trade at Positive Crossover
When the +DI line intersects the -DI line from the bottom It signals a bullish trend. To identify the strength of the trend you need to check the ADX line the white colour line. If the ADX line is above the middle line i.e 23 It signals a strong bullish trend and here we can make a buy trade.
Make Sell Trade at Negative Crossover
Similarly, When the -DI line intersects the +DI line from the top. It signals a bearish trend. Now, Again check the ADX line for trend strength. If the ADX line is above the middle line i.e 23. It signals a strong bearish trend and here we can make a sell trade.
Test your skill
I have covered everything about the ADX indicator in this article. This is one of the best indicators that I have seen. If also want to gain some good results from this try this indicator in the demo account of Pocket Option. Tell me by comment below If you found this indicator useful. Till then…. I wish you the very best of luck!!