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