Commodities Trading ADX Indicator
The ADX technical indicator is a momentum indicator developed 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 Commodities trend. It should be noted that while the direction of commodities 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 commodity technical indicators to create a commodities trading strategy.
Commodity Trading technical analysis ADX indicator levels turning up from below 20 is an early commodity signal of a new commodity trend while declining levels turning down from ADX indicator levels above 30 as deterioration of the current commodity trend.
ADX technical indicator should be used as part of a commodity strategy that includes the +DI and -DI lines. Most commodities trading platforms integrate the original ADX indicator with the +DI & -DI indicators (DMI Index Indicator) and collectively refer to the whole system as the ADX indicator.
In the commodities trading example illustrated and explained below:
ADX indicator is the light greenline
+DI is the blue-line(bullish line)
- DI is the red-line(bearish line)
Commodity Trading ADX Technical Indicator - Commodity Trading ADX Technical Analysis - Commodity Trading ADX Strategy
- Bullish Trend - Commodity Trading ADX Technical Analysis- when the +DI, blue-line is above the -DI, redline
- Bearish Trend - Commodity Trading ADX Technical Analysis- when the -DI, redline is above the +DI, blueline
Bullish Trading Signal
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 Commodities Technical 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 Commodities Technical Indicator levels above 20 shows there is a strong upward commodities trend.
Bearish Trading Signal
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 commodity signal will be generated when this bearish commodity signal is accompanied by an ADX Commodities Technical Indicator value of above 20.
ADX Buy & Sell Commodity Trade Signal Indicator - Commodity Trading ADX Technical Commodity Technical Indicator Described
