The ADX indicator is the abbreviation of the average trend indicator. It is one of the technical indicators used for trend judgment. It is mainly used to judge the strength of a trend. In the adx indicator, the trend index has three lines: the rising index line +di, the falling index line -di and the average trend index line adx.

[1] The adx indicator cannot reflect the trend of stock price fluctuations, it reflects the degree of this trend change.

[2] The entry signal of the adx indicator is the +di line crossing the adx line, and the exit signal is the -di line crossing the adx line.

[3] If the position of the adx line is higher than the two di lines, and when the direction of the adx line changes, it generally indicates that the trend is about to change, and investors can make profits as soon as possible.

[4] When the adx line is lower than the two di lines, it is best not to enter the market, because there is no particularly obvious trend at this time.

[5] If the value of the adx line is lower than 25, it also shows that the stock price has no obvious volatility trend, and there is no need to pay attention to the position of di at this time.

[6] Under normal circumstances, the adx line represents the strength of the trend force, but when any one of the +di line and -di line rises with the adx line, it means that the stock price fluctuates in that direction.

Generally speaking, the adx indicator is more suitable for traders who are accustomed to the trend of trading. In a highly volatile market, it is not suitable to use the adx indicator, because the signals sent by the trading system will be very frequent; and in a market with a clear trend, It is a good stage for the adx indicator to play a role.

ADX indicator use skills

  1. The ADX indicator cannot reflect the trend of foreign exchange rate fluctuations, it reflects the degree of such trend changes;
  2. The entry signal of the ADX indicator is +DI14 crossing, and the exit signal is -DI14 crossing;
  3. If the extreme trading rules begin to take effect, Rule 2 will no longer apply. If the DI indicator breaks through, investors can use extreme points as their stop loss points. And in the next few trading days, if the stop-loss point does not have a stop-loss effect, you do not need to care about the breakdown signal issued by DI again;
  4. If the ADX line is higher than the two DI lines, and when the direction of the ADX line changes, it generally indicates that the trend is about to change, and investors can make profits as soon as possible. When the DI line breaks through the stop loss point Grandpa is the extreme point that triggers the stop loss, you can do the final liquidation;
  5. If the ADX line is higher than the two DI lines, and the ADX value is too high, it means that the current exchange rate trend has been running for some time, and it is not a particularly good time to open a position, because the trend is likely to be in the future changes happened.
  6. When the ADX line is lower than the two DI lines, do not enter the market at the end because there is no particularly obvious trend at this time;
  7. If the value of the ADX line is lower than 25, it also shows that there is no obvious volatility trend in the foreign exchange market, and there is no need to pay attention to the position of the DI line at this time;
  8. Under normal circumstances, the ADX line represents the strength of the trend force. At this time, the +DI line and the -DI line, which rises together with the ADX line, indicate that the fluctuation trend of the exchange rate fluctuates in that direction.

The ADX indicator can promptly and accurately reflect changes in foreign exchange trends. Traders can have a further understanding of the ADX indicator and use it in actual transactions.