ADX Trend – Binary Options göstəriciləri

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Contents

ADX EMA 60 Seconds Strategy for Binary Options

60 Seconds Strategy – Quick and effective trading

I am well aware that many of you expect the fastest possible results and real profits from transactions on Binary Options. So I prepared a brief description of a strategy, which I find not only very effective, but also simple to use. It is based on the combination of two standard indicators available in each analytical program – ADX and EMA. We recommend uTrader, which is a regulated broker in the EU, and has an accounts in many local currencies.

ADX EMA strategy

To use this strategy we will use price charts with a one-minute time frame. The expiration time of the operation as the name suggests will be 60 seconds. As I just mentioned, we use two indicators here:

ADX

ADX (Average Directional Movement Index) – average directional index of movement. This is a standard indicator for the MetaTrader 4 platform. The default period for the indicator is 14 candles (in our strategy it will be 5 candles). The period is working, because the more investors see the signals, the better because of the accumulation of purchasing power.

ADX alone verifies only the occurrence of a trend when it exceeds the value of “20” and continues to rise and the strength of the trend. This is complemented by two additional lines – + DI (line of bullish movement) and -DI (line of bearish movement). Thanks to them, we receive confirmation of input or exit signals.

Settings for ADX indicator Change colours of lines

Moving Average

Moving Average – in our case, 28 periods. If we used only this indicator, closing or opening positions would occur at the moment of crossing the Exponential Moving Average by price.

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Settings for Exponential Moving Average 28

CALL OPTION – GROWTH

In the case of a 60 second ADX EMA strategy we decide to open CALL option,when :

  • the green ADX line is located above the red line
  • price crosses and is above EMA 28
  • the body of the signal candle presents an upward trend
  • the signal is even stronger when the candle preceding the signal candle also has a bullish body

Price crosses the moving average, the green line ADX is above the red line, while the body of the signal is bullish.

PUT OPTIONS – FALL

In the case of the 60-second ADX EMA strategy, we decide to open the PUT option when:

  • the red ADX line is above the green line
  • price crosses and is below EMA 28
  • the body of the signal candle presents a downward trend
  • the signal is even stronger when the candle preceding the signal candle also has a bearish body

The price crosses the moving average, the red line is above the green, and the signal candle body is bearish

The chart below shows some examples of bets on GBP/USD M1 :

The first three strong signals – all the assumptions are met. The last signal is weak – because the candle that precedes the signal hasn’t bearish but bullish body.

Based on: https://www.binaryoptionsdaily.com

Try trading binary options on currencies, indices, commodities and shares of popular companies. If you lose, regardless of the size of the loss, you never lose more than you bet. You can also choose other expiration hours for options, both shorter and longer. Create a real account and earn 50 to 150% Welcome Bonus.

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How to Use ADX Indicator to Trade Stock & Binary Options

The ADX, or Average Directional Index measures the strength of a trend and can be useful to determine whether an asset is currently in a trending market or a ranging market.

The ADX indicator ranges from 0 to 100. An ADX reading of 20 and lower indicates ranging or weak trend. An ADX reading of 30 and above indicates a trending market.

+DI Line & -DI Line

The ADX, or Average Directional Index, is actually a composite average of the +DI indicator and -DI indicator.

The +DI or Positive Directional Index indicator is representative of how strong or weak the buyers of the market are.

The -DI or Negative Directional Index indicator is representative of how strong or weak the sellers of the market are.

As the ADX is comprised of both the +DI and -DI indicators, it does not indicate whether the trend is up or down but simply the strength of the overall trend in the market.

DI Line Crossover Signals

When the +DI line crosses above the -DI line, this is an indication that buyers are taking control of the market and traders can look to go long or buy call options.

When the -DI line crosses above the +DI line, this is an indication tht the sellers are taking control of the market and traders can look to go short or buy put options.

Continue Reading.

RSI (Relative Strength Index) Indicator Explained

The RSI or Relative Strength Index indicator is bounded momentum based technical indicator that attempts to predict a change in momentum. . [Read on. ]

MACD Indicator Explained

MACD (usually pronounced Mac-Dee) stands for Moving Average Convergence Divergence. The MACD indicator gives the short to medium term trend of the price action. [Read on. ]

Bollinger Bands Explained

The bollinger bands are adaptive trading bands that reflect changes in volatility and provide a better view of the true extent of the price action. [Read on. ]

Parabolic SAR Explained

The Parabolic SAR indicator (or PSAR) is designed to calculate the point in time when there emerges a better than average probability of a trend switching directions. [Read on. ]

ADX Indicator Explained

The ADX, or Average Directional Index measures the strength of a trend and can be useful to determine whether an asset is currently in a trending market or a ranging market. [Read on. ]

Best ADX Strategy Built by Professional Traders

All Forex traders strive to build their own profitable strategies. Well, this day is your lucky day! We’re willing to share the best ADX strategy with you, which was built by a professional trader. Our team at Trading Strategy Guides firmly believes the easiest way to become a profitable trader is to mimic the behavior of professional traders.

However, we haven’t covered how to measure the strength of the trend in any possible time frame. You can only measure the strength of the trend by using a special trading indicator. For example, the ADX, which is an acronym for Average Directional Index.

Detecting a strong directional move is the most important skill for all traders to have. No matter what type of trader you are, after you enter a position you need a strong directional move. In order to make a profit, the move must be in the direction of your trade.

The ADX indicator trading rules can help you achieve your financial goals.

Before moving forward, we must define which technical indicator we need for the best ADX strategy. We will define the rules of ADX indicator trading. Also, read the hidden secrets of moving average, for more information.

ADX Indicators for Futures

The principles of the Average Directional Index can apply to almost all tradable assets including stocks, exchange-traded funds, mutual funds, and futures contracts. ADX has become exceptionally useful in futures markets for many reasons:

  • With a standard range of 14 bars, ADX offers a “bigger picture” than many other technical indicators.
  • ADX is time adjusted, meaning that the most recent data is given exceptional weight.
  • ADX helps you identify the strength of a trend, which will be useful for any contract being executed in the near future.
  • ADX makes it very easy to compare mutually exclusive futures contracts at once.

Futures traders enjoy using ADX as a metric because it offers the perfect blend of past and present data and future predictability. Successfully purchasing futures contracts will require you to identify which potential contracts are mispriced in the status quo. Using ordinary ADX readings for future contracts makes this possible.

Using ADX readings for major indexes (such as the DJIA, S&P 500, and others) can also help you identify whether the general market is experiencing bearish or bullish conditions.

ADX Indicator Trading Rules

Before going further into the ADX indicator trading rules, let’s define what the ADX indicator is and how you can profit from it.

The ADX indicator simply measures the strength of a trend and whether we’re in a trading or non-trading period. In other words, the ADX is a trend strength indicator. This method of technical analysis is used to identify the emergence of strong downtrends and buy signals.

We need to be very careful about how we read and interpret the ADX indicator. It is not a bullish and bearish indicator. ADX’s moving average only measures the strength of the trend.

So, if the price is going UP, and the ADX indicator is also going UP, then we have the case for a strong bullish case.

The same is true if the price is going DOWN and the ADX indicator is going UP. Then we have the case for a strong bearish case.

The first ADX indicator trading rule says, a reading below 25 signals a period of non-trading or ranging market. The second ADX indicator trading rule says, when the ADX is above 25 is enough to signal the presence of a strong bullish/bearish trend.

Going forward, keep in mind that the ADX indicator doesn’t give you any information about the direction of the market. It just provides you with information about the strength of a trend.

ADX Indicator settings

The ADX indicator uses a smoothing moving average in its calculation. We find out that the best ADX indicator settings to use is 14 periods. With our ADX indicator settings, you’ll have more accurate signals and it will help you get in a trade earlier.

The ADX indicator works best when used in combination with other technical indicators.

The best ADX strategy also incorporates the RSI indicator in order to time the market. The ADX indicator can only help us to gauge the intensity of the trend. We need to RSI indicator for entry signals.

The RSI uses a 20-period setting, which is the same as the ADX indicator settings.

Finally, your chart setup should have at the bottom both the ADX and RSI indicator. It should be the same as in the figure below.

Now, let’s see how you can effectively trade with the best ADX strategy. You will learn how to make profits by applying the ADX indicator trading rules.

The Best ADX Strategy

The ADX indicator trading rules will ensure that you only trade when there is a strong trend on the 5-minute chart or the daily chart. In this regard, the best ADX strategy is a universal strategy that performs the same, regardless of the time frame used.

Moving forward, we’re going to look for selling opportunities.

Step #1: Wait for the ADX indicator to show a reading above 25.

Before we even look to see if the market goes up or down, we must first wait for the ADX indicator to show a reading above 25. Based on the ADX indicator trading rules, a reading above 25 is signaling a strong trend and the likelihood of a trend developing.

We all know that the trend is our friend, but without real strength behind the trend, the newly trend formed can quickly fade away.

In order to gauge the direction of the trend, we also need to look at the actual price action. This brings us to the next step of the best ADX strategy.

Step #2: Use the last 50 candlesticks to determine the trend. For sell signals, look for price to develop a bearish trend.

No matter of your time frame, we need a practical way to determine the direction of the trend.

By using a sample size of 50 candlesticks to determine the trend we ensure that we trade in the moment of now. We like to keep things simple, so if the price is heading lower during the last 50 candlesticks we’re in a bearish trend.

Now, it’s time to focus on the catalyst that will trigger our sell signal for the best ADX strategy.

Step #3: Sell when the RSI indicator breaks and show a reading below 30.

For our entry signal, we’ll be using the RSI indicator that uses the same settings as the ADX indicator settings. Normally the RSI reading below 30 shows an oversold market and a reversal zone. However, smart trading means looking beyond what the textbook is saying.

In a strong trend as it’s defined by the ADX indicator that’s precisely what we want to see. We want more sellers coming into the market.

So, we want to sell when the RSI indicator breaks and shows a reading below 30.

The next important thing we need to establish is where to place your protective stop loss.

Step #4: Protective Stop Loss should be placed at the last ADX high.

In order to determine the stop-loss location for the best ADX strategy, first identify the point where the ADX made the last high prior to our entry. Secondly, find the corresponding high on the price chart from the ADX high and there you have it your SL level.

Last but not least the best ADX strategy also needs a place where we need to take profits, which brings us to the last step of this unique strategy.

Step #5: Take Profit when the ADX indicator breaks back below 25.

The best ADX strategy seeks to only capture those profits resulted from the presence of a strong trend. Once the prospects of a strong trend fade away we look to take profits and wait for another trading opportunity.

To accomplish this we take profits as soon as the ADX indicator breaks back below 25.

An ADX reading back below 25 suggests the prevailing trend is running out of strength.

Note** The above was an example of a SELL trade using the ADX indicator trading rules. Use the same rules but in reverse, for a BUY trade. In the figure below you can see an actual BUY trade example.

Conclusion – ADX Indicator

The best ADX strategy gives us very useful information because a lot of the time, we as traders don’t want to get into something that’s moving nowhere and not trending in a strong fashion. By applying the ADX indicator trading rules one can take advantage of the strength of the trend and cash in quick profits. The bottom line is that the best profits come from catching strong trends and the best ADX strategy can help you accomplish your trading goals.

You can also read about the Trader Profile Quiz.

The best ADX strategy is similar to the Best Momentum Trading Strategy for Quick Profits because both strategies seek to take advantage of the strength of the trend.

Thank you for reading!

Please leave a comment below if you have any questions about this strategy!

Also, please give this strategy a 5 star if you enjoyed it!

(47 votes, average: 4.45 out of 5)
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