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