ADX DMI Day Trading Strategy | How To Use The ADX Indicator

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Hello guys, in this video we’ll discuss about the ADX indicator, more specifically

how to correctly analyze its signals, how to analyze the market by taking into account

the ADX and we’ll also see some interesting trading strategies for Forex and stock market,

using this indicator.

The Average Directional Movement (or the ADX) is an indicator that measures trend strength

and shows trend direction.

Basically, the ADX tells traders whether the bulls or the bears are in control on the market.

The ADX is an oscillating indicator, displayed as a single line, ranging from 0 to 100.

The ADX only indicates the strength of the trend and does not indicate its direction.

In other words, the ADX is non-directional, meaning that it measures the strength of a

trend, but doesn’t distinguish between uptrends and downtrends.

So, during a strong uptrend, the ADX rises and during a strong downtrend, the ADX also


Here is how you correctly read what ADX is saying about the market.

Here are 5 aspects regarding the interpretation of the ADX:

When ADX (the blue line) is above 25, trend strength is strong enough for strategies involving

trend following In this example, we see the ADX line crossing

the 25 threshold, indicating a strong bull market.

Usually, once the ADX gets above 25 this signals the beginning of a trend.

Big moves (upwards or downwards) tend to happen when ADX is right around this number.

Of course you can experiment with this number, some traders that want faster signals, tend