ADX Forex Swing Trading Strategy


ADX Forex Swing Trading Strategy

This strategy is based on the ADX indicator. ADX is an abbreviation of Average Directional Index. It measures the strength of a trend and can be useful to identify if a trend is weak or strong. High readings indicate a strong trend and low readings indicate a weak trend.

Range market will develop when this indicator is showing a low reading. it is not advisable to trade a pair with a low reading.

On the chart, there are 2 other lines, it is the +DI and -DI or directional indicator. Just ignore the negative and positive directional indicator. to avoid confusion and more losses. Focus on the ADX only. Trade when ADX indicator is above 25.

The currency pair is ranging when ADX is between 0 and 25. It means the market is going sideways, so avoid trading in this situation.

The trend will begin when the ADX gets above 25. Big moves may happen when ADX is within this number.

The trend is strong when ADX indicator gets above 30.

Note: When ADX is above 50, the trend may come to an end and there will be a consolidation.

Combine ADX with other strategies such as EMA based trades and others if you want to trade.

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