Commodity Trading ADX Strategy

The ADX indicator is a momentum indicator created by J. Welles Wilder.

ADX indicator is used to measure the strength of commodity trends on a scale of 0 - 100; the higher the ADX indicator value the stronger the current Commodity Trading trend. It should be noted that while the direction of commodity price is important to the ADX indicator calculation, the ADX indicator is not a directional indicator. ADX indicator values above 30 indicate a very strong commodity trend, while ADX indicator values below 20 indicate no trend commodity market - ranging market.

Traders typically use the ADX technical indicator as a filter combined with other indicators to create a commodity trading strategy.

Commodity Trading technical analysis ADX indicator levels turning up from below 20 is an early signal of a new commodity trend while declining levels turning down from ADX indicator levels above 30 as deterioration of the current commodities trend.

ADX technical indicator should be used as part of a commodity trading strategy that includes the +DI and -DI lines. Most commodity platforms integrate the original ADX indicator with the +DI and -DI indicators (DMI Index Indicator) & collectively refer to the whole system as the ADX indicator.

In the commodity example shown below:

ADX indicator is the light green-line

+DI is the blueline(bullish line)

- DI is the red-line(bearish line)

Commodities Trading ADX Indicator - Commodity ADX Technical Analysis - Commodity Trading ADX Strategy

• Bullish Trend - Commodity Trading ADX Technical Analysis- when the +DI, blueline is above the -DI, red-line
• Bearish Trend - Commodity Trading ADX Technical Analysis- when the -DI, redline is above the +DI, blue-line

Commodities Trading ADX Technical Analysis

A bullish commodity signal is generated when the +DI line is above the -DI line, when the blue line is moving above the red line.

To identify a strong bullish commodity signal commodity trader should wait until the ADX Commodity Trading Indicator values are above 20, and the blue line is above the red line. This is a bullish commodity signal because the DMI Index system identifies the commodity signal as a buy, while ADX Commodity Trading Indicator levels above 20 shows there is a strong upward Commodity Trading trend.

Commodity Trading ADX Technical Analysis

A bearish commodity signal is generated when the red line is above the blue line that is the -DI line is above the +DI line. A strong sell signal will be generated when this bearish commodity signal is accompanied by an ADX Commodity Technical Indicator value of above 20.

Commodities Trading ADX Buy & Sell Commodity Trade Signal Indicator - Commodities Trading ADX Technical Indicator Technical Analysis