ADX Oscillator

ADX– In contrast of ATR, the ADX is very useful to determine the strength of the trend. The ADX indicator is a simple chart built on values between 0 and 100, within which they move 3 curves:

  • A first blue curve (+ DI) indicating the intensity of the bullish move.
  • A second red curve (-DI) indicating the strength of the bearish trend.
  • The last curve, light gray color, that it is the result of the other two and that it is the real ADX.
adx oscillator

Mainly we’ll have two signals:

  • Buy: when the indicator moves within 25 area and the + DI intersects from below to upwards the -DI. 
  • Sell: when ADX indicator moves over 25 area and the -DI intersects from top to bottom the + DI.

DI means directional indicator, which preceded by the sign “-“ indicates, as said, the strength of the bearish trend, and when it is preceded by a “+” sign, indicates the strength of the bullish trend.

We suggest to use indicators with our partner Trading View and take a look also at the Candlestick Patterns guide.

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