ADX Momentum Breakout Indicator Analysis and DX Momentum Strategies Signals
ADX is a momentum indicator used to trade gold - ADX Momentum Breakout Indicator.
ADX Momentum Breakout Indicator is used to measure the strength of market trends on a scale of 0 - 100; the higher the ADX Momentum value the stronger the current trend. It should be noted that while the direction of the price is important to the ADX Momentum indicator calculation, the ADX Momentum indicator itself is not a directional indicator. ADX Momentum Indicator values above 30 indicate a very strong trending market, while ADX Momentum Indicator values below 20 indicate non-trending market or a ranging market.
Traders use the ADX indicator as a filter along with other indicators to create ADX Momentum Strategy.
Many traders interpret ADX momentum indicator zones turning up from below 20 as an early signal of a new emerging trend break out signal - while declining ADX indicator levels turning down from above 30 as a reversal of the current trend.
ADX Momentum indicator should be used as part of a system that includes the +DI and -DI lines. Most trading platforms integrate the original ADX Indicator with the +DI and -DI indicators -DMI Index and collectively refer to the whole indicator system as the ADX Momentum Indicator.
In the ADX indicator example depicted and explained below:
ADX Momentum Indicator is the light green line
+DI is the blue-line - bullish line
- DI is the red-line - bearish line
ADX Gold Strategy That Works - ADX False Breakout Indicator MT4
Bullish Trend - when +DI, blueline is above the -DI, red-line
Bearish Trend - when -DI, red line is above the +DI, blue line
ADX Momentum Strategies Methods PDF
A bullish signal gets generated when the +DI line is above -DI line, when blue line is moving above red line.
To identify a strong bullish ADX Momentum Break out signal we wait until the ADX Momentum indicator values move above 20, & the blue line is above the red-line. This is a bullish ADX Momentum Breakout signal because the DMI system identifies the signal as a buy, while ADX Momentum indicator levels above 20 shows there is a strong upward momentum trend.
ADX Momentum Strategies Methods PDF
A bearish signal gets generated when redline is above the blue line i.e. -DI line is above the +DI line. A strong short signal will be generated when this bearish signal is accompanied by an ADX Momentum value of above 20.
To identify a strong bearish ADX Momentum Breakout signal we wait until the ADX Momentum indicator values move above 20, & the redline is above the blue-line. This is a bearish ADX Momentum Break out signal because the DMI system identifies the signal as a sell, while ADX Momentum indicator levels above 20 shows there is a strong downwards momentum trend.
