HOW TO TRADE FOREX WITH AVERAGE DIRECTIONAL MOVEMENT INDEX

Dear traders, today, another effective technical indicator is added into your forex trading guide. The indicator is average directional movement index (ADX). I loved this technical indicator because it is very effective in measuring the strength of the trend. 

To me, it explains the bull and bear power. Let see how this technical indicator an be used in forex trading. 

Average directional movement index (ADX), source:metatrader4.com

Average directional moving index has an ADX line, a +DI line and a -DI line. +DI line indicates the bull power and -DI line indicates the bear power. 

When the +DI line crosses the -DI line from down, it indicates that the bull is becoming powerful against bear. Similarly, When the +DI line crosses the -DI line from up, it indicates that the bull is becoming week against bear.

Average directional movement index is not used to confirm the entry price level rather it explains the war between bull and bear. So the traders should consider the crosses confirmed by other technical tools like chart patterns, technical indicators (RSI, MACD) and candlesticks patterns.

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