5 Feb 2015



I love when markets get so flat as this, because it means it is time to take out one of my favourite indicators - ADX. I don't use this indicator often as it works the best after prolonged periods of low volatility, but it is simply the best in situations like this.

Generally after market has been stuck in such a tight consolidation the next move tends to be very explosive and ADX can help you to determine the validity of it.

So in this case I am waiting for the ADX break above the 25 level accompanied by a price breakout as well, however, to measure if the breakout is real, we need to see that the DI+ line has made a higher peak then the previous DI- line (I am looking for the DI+ to go higher than 36)

What do you think? Do you use ADX in your everyday trading?

To learn more about ADX visit: https://www.youtube.com/watch?v=ARJcrjaPAS8


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