The average direction index (ADX) is a technical indicator used for trend analysis. This shows how strong and reliable the trend is. Do not confuse with the direction of the trend. The ADX indicator does not indicate the direction of the trend. There is only evidence like the strength of a trend. The ADX indicator is considered one of the best trend indicators. The reason is that it shows the strength of the trend with greater precision and is very easy to understand.
The ADX is just a curved line that moves between 0 and 60, for example. Operators see ADX values above 35-40 as very strong trend signals. It’s when we want to be in the market driving this strong movement! Conversely, values greater than 20 and less than 30 are indicators of a developing trend. If the ADX value is less than 20, this usually indicates a trendless market condition. This is important because most counterfeits occur Forex candlestick patterns during these low ADX values. Therefore, it is generally recommended to stay away from the market when the ADX is below 20 unless you are trading some sort of outreach strategy. The image below shows you how the ADX indicator works:
How to work with mt4
This is the USD / JPY chart per day for the period from July 29, 2014 to February 17, 2015. Then you see the indicator of your ADX 40.0 online. As you can see, the ADX moves several times to 40.0. At this very moment, the strength of the uptrend is increasing. As ADX does not provide information on the direction of the trend, we need to decide where the trend is going. In this case, and most of the time, a quick glance at the table will make it clear.
This is the USD / CHF on the H4 chart. The period is from January 12 to February 11, 2016. We also put a volume indicator at the bottom of the table, so you can see why extend the Bollinger Bands. As you can see, the Bollinger Bands were very close between January 12 and February 3, 2016.
This means that trading volumes in USD / CHF are relatively low and Swissy is broader than trends. We place a line on the volume forex indicators, which shows Swissy’s average volumes through February 3rd.
On February 3, 2016, the Bollinger Bands began to grow with exceptionally high Swiss volumes. At the same time, the price goes down. That’s when you should consider USD / CHF for a short time. Volume indicator confirms expansion of operations by USD /