EPISODE 3
Average Directional Index (ADX) - TREND Indicator
It's kind of an oscillator ADX values range from 0 to 100, and is intended to give you a signal of trend strength.
If ADX is below 20, the trend is weak. If it’s above 50, the trend is strong. Bear in mind though, that ADX doesn’t tell you the direction of the trend, just the strength.
It's used mostly to detect fake breakouts, since when is below 20 it indicates that there is no clear trend.
Combined with a directional trend indicators, such as Parabolic SAR, ADX can confirm that a trend is strong and is going to continue. This should give you more confidence when entering into a position.
ADX can also help you to exit the trade when the trend is weak.
Average Directional Index (ADX) - TREND Indicator
It's kind of an oscillator ADX values range from 0 to 100, and is intended to give you a signal of trend strength.
If ADX is below 20, the trend is weak. If it’s above 50, the trend is strong. Bear in mind though, that ADX doesn’t tell you the direction of the trend, just the strength.
It's used mostly to detect fake breakouts, since when is below 20 it indicates that there is no clear trend.
Combined with a directional trend indicators, such as Parabolic SAR, ADX can confirm that a trend is strong and is going to continue. This should give you more confidence when entering into a position.
ADX can also help you to exit the trade when the trend is weak.
