Forex is the multimillion markets with trade of 4.3 trillion USD a day. Forex is the business in which traders’ trade currencies with each other. In Forex Trend is your friend, the profitable currency trading is done with the trend. Remember Trend is your friend. Sometime I have been asked in my email that how to know that price is trending or not.
To know that price is trending or not we use Average Directional Index (ADX) indicator. The Average Directional Index (ADX) indicator can be used with some other indicators like MFI, RSI or Two simple moving averages or 9/30 or 20/50 to get confirmation for the entry and exit.
Average Directional Index (ADX) Details:
Average Directional Index (ADX) indicator has three lines
- Style Line: This line shows power of the trend.
- +DI Line Shows Uptrend
- -DI Line Shows Downtrend.
When +DI cross – DI in upward the uptrend is confirmed
When -DI cross + DI in upward the downtrend is confirmed
Here is the Daily chart of EUR/USD that shows profit of +1550 pips with trend confirmation with Average Directional Index (ADX).