Welles Wilder developed the index directional half (ADX) to evaluate the strength of the trend, either upward or downward. It is important to determine whether the market is up or down to negotiate, because certain indicators give more useful results depending on the strength and direction of the trend.
ADX combines the + DI (blue line in the chart is the directional movement upward), and - DI (directional movement to the bottom, red line in graph) and then smooth the data with a moving average to provide a measure of the strength of the trend. Because it uses both + DI and - DI, The ADX (green line graph) gives no indication of the direction of the trend, only determines the fair. Generally, the readings of ADX on line 40 indicates a strong trend and readings below 20 a weak trend. To take a trend in its early stages, you might find the action with ADX that advances out of 25. Conversely, an ADX decline from above 40 might indicate that the current trend is weakening.
Interpretation
1. Cross Sales:-DI (red line) crosses over + DI (blue line). Note the green line ADX indicates a rank above 25%.
2. Crossing to purchase: and after crossing line + DI (blue line), the ADX line is a confirmation that the trend is broadly directional movement.
3. Crossing Sales and subsequent crossing-over DI, ADX line of green, a sign that the movement is sustainable.
4. Crossing the ADX line on level 40 and later re: possible depletion signal directional movement.
5. And correction of false signals to the low signal: note that the indicator gives immediate output from a transaction cost and makes a signal in the opposite direction.
6. Crossing purchase: watch as the line of work within the ADX as an indicator for the resistance line + DI and then the new maximum price is not moving and the price is lateralized.
Technical D'Agostino (IT). Horizontal Intraday Trend Analysis
Dr M D'Agostino has developed a trading technique that has been called TI (Intraday Trading)
It is a short-term strategy that takes advantage of two conditions, in principle check the maximum and minimum of the last 4 sessions, candlelit bar graph or 1 hour, excluding that are currently under development.
1. Fixing the support or resistance at the maximum or the minimum of the last 4 sessions. This is the first condition gives us a warning of the market.
2. Filter is used as an average of 10 sessions of typical price (Maximum + Minimum + Close / 3), it is expected that after the breakup of the horizontal support of point 1. Besides the price is located 8 points below or above the TP (typical price).
3. Income upward position when the price has broken the resistance of both the maximum of the last 4 meetings (excluding the session in progress) also exceeded the TP line with over 8 points.
4. Entering a downward position when the price has broken the support of both the minimum of the last 4 meetings (excluding the session in progress) also surpassed the low line with TP plus 8 points.
5. Stop Loss is a secure system since the stop is positioned to spread his 17 + points below the price of entry into the operations up and spread his 17 + points higher than the price of entry into the positions to the bottom. Or when the price closed session in time, over (operations to low) or below (upward operations. The line of PT (MA 10 sessions typical price)
6. Take Profit: It is recommended every 15 pips from the transaction once entered a trailing stop (stop of the shift in the direction of the operation) to 10 points higher from the price of entry or exit. Example Entry 1.2030 Initial stop 1.2050 buy, current price 1.2065, stop loss run to 1.2060 and so on.
