How To Trade Average Directional Index (ADX)

By Posted on
Trade Average Directional Index (ADX)

The Average Directional Index (ADX), invented by J. Welles Wilder is referred to as an oscillator technical analysis indicator. ADX fluctuates between 0 and 100. Readings below 20 show a weak trend while above 40, show a strong trend.

Indicator readings above 85 are rare and show a very strong up or down trend in the market. Please note: ADX does not give you an indication about the trend (up or down), it gauges the strength of the currency trend.

USD/CHF Average Directional Index (ADX) Daily Chart

Trade Average Directional Index

Type of technical indicator: Oscillator

Forex signals from ADX

There are no signals from the ADX indicator.

Use in combination with other forex technical indicators and tools to trade strong readings above 40.

Forex Advertising rectangle - headway
Forex Advertising Package
Gravatar Image
Professor FX - https://www.prof-fx.com
Prof FX is the world’s leading forex education website, providing investors all the required tools to become a top class forex trader. The Prof-FX.com team offers global investors an array of resources, including financial news by the minute, forex brokers reviews, fundamental analysis, technical analysis, forex tools, metatrader indicators and much more.

Leave a Reply

Your email address will not be published. Required fields are marked *

Related

Use the 5 Whys to become a better trader

Use the 5 Whys to become a better trader

A while ago, I read an excellent book called The Lean Startup by Eric Ries. The Lean Startup describes a

Reducing the Effect of Emotions on FX Trading

Reducing the Effect of Emotions on FX Trading

It is important for every forex trader to be able to manage his or her emotions so as to not

Types of Forex Orders Explained

Types of Forex Orders Explained: A Practical Guide to Entering and Exiting the FX Market

Understanding forex order types is a fundamental skill every trader must master before executing trades in the currency market. Forex

How to Trade Shooting Star Candlestick Patterns in Forex

How to Trade Shooting Star Candlestick Patterns in Forex

Japanese candlestick analysis remains one of the most widely used technical tools in forex trading, and among its many formations,

Multinational Corporations Role in Forex Markets

Multinational Corporations Role in Forex Markets

Multinational corporations are hedgers. Corporations that operate in multiple countries often run into scenarios in which they have accounts receivable

Supply and Demand Forex Trading Strategy Explained

Supply and Demand Forex Trading Strategy Explained

Supply and demand are the fundamental forces that drive price movement in any market. This principle applies universally – from

Top 10 Candlestick Patterns

Top Candlestick Patterns Every Forex Trader Should Master to Trade the Markets Confidently

Candlestick patterns are among the most powerful and widely used tools in technical analysis. For forex traders—especially beginners—learning how to

How Use William’s Alligator

How Use William’s Alligator in Your Forex Strategy

In the previous articles, we have covered Moving averages and Trend lines. The ‘Alligator’ Indicator covered in this blog is a mix