Trade Gold Trading

No Nonsense ADX Analysis

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

ADX is used to determine the power of trends on a scale of 0 - 100: the higher the ADX value the stronger the current trend. It should be noted that while the direction of price is important to the ADX calculation, the ADX isn't a directional technical indicator. ADX trading indicator readings above 30 indicate a very strong trend, while ADX readings below 20 indicate no trend gold market - ranging market.

Traders pair the ADX with other tools as a filter for strategies.

Technical analysis ADX levels turning up from below 20 is an early signal of a new trend while declining levels turning down from ADX levels above 30 as deterioration of the current trend.

ADX is best used as part of a broader strategy that incorporates the +DI and -DI lines. Many platforms bundle these together as part of the DMI Index Indicator system, collectively referred to as the ADX indicator.

In the illustration depicted and explained:

ADX is the light green-line

+DI is the blue line(bullish line)

- DI is the red line(bearish line)

No Nonsense ADX XAUUSD Strategies - Place ADX Trading Indicator in Chart

No Nonsense ADX - No Nonsense ADX Trading Analysis - No Nonsense ADX XAUUSD Strategy

  • Bullish Trend - No Nonsense ADX Technical Analysis- when the +DI, blue line is above the -DI, red line
  • Bearish Trend - No Nonsense ADX Technical Analysis- when the -DI, red line is above the +DI, blue line

Bullish Signal

A positive signal appears when the +DI line is above the -DI line, meaning the blue line is moving above the red line.

To confirm and identify a robust bullish signal, a gold trader should only proceed when the ADX values exceed 20, and concurrently, the blue line is positioned above the red line. This combination signals a bullish trade setup because the DMI strategy interprets this as a buy signal, while ADX readings above 20 confirm a strong upward momentum in Gold prices.

Bearish Signal

A bearish trading signal gets derived & generated when the red line is above the blue line that's the -DI line is above the +DI line. A strong sell signal will be derived/generated when this bearish trading signal is accompanied by an ADX Indicator value of above 20.

No Nonsense ADX indicator for buy and sell signals explained.

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