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 typically use the ADX as a filter combined with other indicators to create a strategy.
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 should be used as part of a strategy that includes the +DI and -DI lines. Most platforms integrate the original ADX with the +DI and -DI indicators (DMI Index Indicator) & collectively refer to the whole system as ADX indicator.
In the illustration depicted and explained below:
ADX is the light green-line
+DI is the blue line(bullish line)
- DI is the red line(bearish line)
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 bullish signal gets derived & generated when the +DI line is above the -DI line, when the blue colour line is moving above the red color line.
To identify and spot a strong bullish signal gold trader should wait until the ADX values are above 20, & the blue line is above the red line. This is a bullish trading signal because the DMI strategy identifies the trading signal as a buy, while ADX levels above 20 shows there is a strong upward Gold trend.
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 Trading Indicator value of above 20.
No Nonsense ADX Buy and Sell Signal Indicator - No Nonsense ADX Technical Indicator Described
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