“If you ever wondered when the trend is going to change, this is the indicator you’re going to need…”

Hi there,

I hope all is well and you’re enjoying the information / videos. If you have any questions, as usual, reply to this post below.

If it’s one question I get asked a lot, it’s when should I exit a trade / enter a trade / how do I know the trend is going to finish and go the other way?

Answer: Average Movement Directional Index

To locate the ADX MT4 Indicator, locate the navigation panel, twirl open the indicators folder, and you should find it being the 3rd listed from the top.
Simply click to highlight, while holding down the mouse button, drag the indicator on to the chart, your cursor will look like a square box with an arrow on it.

Let go of your mouse and the indicators property box will appear.

You can change the colors if you wish. I color mine as the colors of the BUY and SELL order window buttons, Buy = Blue, Sell = Red.

In the colors section of the property window, you’ll see “DI+” and “DI-”.
color DI+ Blue, and color DI- red.

Now I tend to use a black background, and just recently I understand that color blind people are unable to tell what blue looks like, my apologise. These videos were done in year 2009. I just hope it’s a different color than the red so one can still follow along.

If you’re using a black background, white or yellow would be a suitable color for the ADX, that’s found via the first tab in the property window, if my memory serves me correctly.

You don’t need to edit any of the numbers, just the colors. Now the thickness of the lines you could change. Play around and see what suits you best.

Ok, once the adx is applied to the chart, what we are looking out for is to locate an instance where the DI+ and DI- are crossing.

If the DI+ crosses from below, up and over above the DI- line, its to say we are in pursuit of an upward move, reversal of previous move.
If the DI- crosses from below, up and over above the DI+ line, its to say we are also in pursuit of a move, but this time, a downward move, or reversal of the previous move.

Hope that makes sense, if not, don’t worry, the video below will help clear things up.

Then once we’ve found a point in the market that any of the above arises, focus on the ADX line, its the White one that we colored earlier (or yellow depending on your choice).

Ideally we need the ADX (the strength / signal line) to rise to a value 30, or be at a value of 30 or above before we enter the trade.

By doing it this way, we are minimizing the possibility of having more losing trades, by filtering out the noise so to speak so we can pocket 80-100% profitable trades as these set ups appear!

Here’s a video to explain more how to use the Average Directional Movement Index indicator.

There you have it.

Hope you enjoyed it, any questions, just hollar with a comment below.

All the best

Loz

Looking for the ONLY Indicator to Produce 100% Wins
http://UltimateGoldenCross.com

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Tagged as: adx, average movement directional index, buy signals, forex course, forex strategy, sell signals, technical analysis