Using The ADX Indicator To Find And Trade Forex Trends

How to Use ADX to Identify Forex Trends. http://www.financial-spread-betting.com/course/technical-analysis.html PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! The Average Directional Index (or, ADX) is an oscillator used to indicate the strength or weakness of a trend. Let's look now at the ADX - the average directional index or average directional indicator or trend indicator as some refer to it. Ultimately, the ADX tells us the strength of a trend focusing on the direction of a market in particular higher highs and lower lows. It is normally used on commodities and currencies but we can use it for other markets as well. The ADX is on most charting packages these days. ADX is based on the premise that a trend is going to give you higher highs in an uptrend so the current high is going to be higher than the previous high and the more of these you get in a row the more weighting is going to be put towards an uptrend and this is used in the directional index (and this is part of the ADX). And its the same with downtrends; lower lows is giving the indicator more credit to that. The important thing to remember on the ADX is that its not directional; its not giving a signal whether its an uptrend or downtrend; it is just telling us the market is trending and its definition of a trend is a series of higher highs (or a series of lower lows as the case maybe). A high reading implies a trending environment; some people use 20 others use 30. When the ADX is above 30 that is usually considered to be a trending environment. Below 30 denotes a choppy market.

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