ADX Candles Indicator

What is the ADX Candles Indicator?

The ADX (Average Directional Index) Candles indicator is a technical analysis tool used in forex trading to measure the strength of a trend. The indicator uses the ADX (Average Directional Index) indicator to determine whether a market is trending or ranging, and then plots the results on a candle chart. The ADX Candles indicator is particularly useful for identifying potential trend changes and for making trading decisions based on the strength of a trend. It can be applied to any currency pair and any time frame.

ADX Candles Indicator Strategy

One possible strategy for using the ADX Candles indicator in forex trading is as follows:

  • Set the ADX Candles indicator on your chart with a period of 14.
  • Look for candles that have a long wick and no or a very small body. These candles are considered strong signals of a potential trend change.
  • If you see a candle with a long wick and no or a small body, check the ADX to confirm that the market is trending. If the ADX is above 25, it is considered a strong trend.
  • If the ADX confirms a strong trend, you can enter a trade in the direction of the trend. For example, if the candle is a bullish candle, you can enter a long trade.

Buy Signal

adx candles indicator Buy Signal
adx candles indicator Buy Signal
  • Look for a bullish candle on the chart with a long wick and a small body.
  • Confirm that the ADX is above 25, indicating a strong trend in the market.
  • Enter a long position at the open of the next candle, after the bullish candle with long wick and small body appears

Sell Signal

adx candles indicator Sell Signal
adx candles indicator Sell Signal
  • Look for a bearish candle on the chart with a long wick and a small body.
  • Confirm that the ADX is above 25, indicating a strong trend in the market.
  • Enter a short position at the open of the next candle, after the bearish candle with long wick and small body appears.

ADX Candles Indicator Pros & Cons

Pros

  • The ADX Candles indicator can help traders identify potential trend changes in the market.
  • It can help traders make decisions based on the strength of a trend.
  • The indicator is easy to use and can be applied to any currency pair and any time frame.

Cons

  • The indicator may not be effective in ranging markets, when the ADX is below 25.
  • It may generate false signals in case of a weak trend, when the ADX is not above 25
  • It doesn’t take into account other fundamental factors that can affect the market such as economic news or geopolitical events.

Conclusion

In conclusion, the ADX Candles indicator is a powerful tool for forex traders to identify potential trend changes and make decisions based on the strength of a trend. It can be applied to any currency pair and any time frame, and can be used in technical analysis tools and indicators for a more comprehensive analysis.

Free Forex Robot