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ADX MT4 Stock Indexes Indicator and ADX Indices Trading Signals

Developed by J. Welles Wilder


This a momentum MT4 Indices Indicator used to determine the strength of a indices price trend; it is derived from the DMI - Directional Movement Index which has two lines.


+DI - Positive Directional Movement Index

–DI - Negative Directional Movement Index


ADX is calculated by subtracting these two values and applying a smoothing function.

ADX Stock Indexes Indicator Technical Analysis



The ADX is not a directional MT4 Indices Indicator but a measure of the strength of the indices trend which has a scale of Zero to 100.


The higher the MT4 Indices Indicator value the stronger the trend.


A value of below 20 indicates that the stock indexes trading market is not trending but moving in a range.


A value of above 20 confirms a buy or sell stock indices signal and indicates a new indices trend is emerging.


Values above 30 signifies a strong trending market.


When ADX turns down from above 30, it signifies that the current indices trend is losing momentum.



ADX combined with DMI


Since the ADX alone is a directionless MT4 Indices Indicator it is combined with the DMI index to determine the direction of indices.

ADX MT4 Indices Indicator combined with DMI- Directional Movement Index

DMI



ADX and DMI Index

ADX MT4 Stock Indexes Indicator and DMI Index


When the ADX is combined with DMI index a indices trader can determine the direction of the indices trend and then use the this MT4 Indices Indicator to determine the momentum of the prevailing indices trend direction.


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MT4 Indices Technical Indicator and Generating Indices Trading Signals


Buy Indices Trading Signal

A buy stock indices signal is generated when the +DI is above –DI, and the ADX is above 20


The Exit signal is generated when the MT4 Indices Indicator turns down from above 30.

MT4 Indices Indicator ADX MT4 Indices Indicator

Buy Indices Trading Signal



Sell Indices Trading Signal

A short signal is generated when the –DI is above +DI, and the ADX is above 20


The Exit signal is generated when the MT4 Indices Indicator turns down from above 30.

MT4 Indices Indicator ADX MT4 Indices Indicator

Sell Indices Trading Signal

 

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