Advance Decline Line (ADL) Forex Strategy
The Advance Decline Line (ADL) forex strategy is a trading strategy that attempts to spot buy and sell opportunities in the market by gauging net advances in the currency pair of focus.
The strategy combines the #!DivStochv5 custom indicator and the Advance Decline Line (ADL) technical study in delivering signals.
MetaTrader4 Indicators: #!DivStochv5.ex4 (default setting), Advance Decline Line.ex4 (ADL) (default setting)
Preferred Time Frame(s): 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours
Recommended Trading Sessions: Any
Currency Pairs: (USD/CHF, EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CAD, NZD/USD, EUR/CHF)
Buy Trade Example
Long Entry Rules
Enter a long position if the following conditions or rules holds true:
- If the Advance Decline Line (ADL) indicator line rises to new record highs in conjunction with the underlying currency pair, it is an indication of a strong bullish participation.
- If the #!DivStochv5 indicator forms dark green histograms with a line that turns yellow, it indicates a bullish trigger i.e. an alert to buy.
Stop Loss for Buy Entry: Place stop loss below short-term support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit on position(s) if the following conditions are true:
- If the Advance Decline Line (ADL) indicator line begins to dip, it is an indication that the market is weak and bulls are pulling out i.e. bears are gaining momentum.
- If the #!DivStochv5 indicator forms red histograms with its line turning blue, it is an indication that price is gaining downward momentum i.e. buy position(s) should be exited or profits taken.
Sell Entry Rules
Initiate a sell entry when the following rules or conditions are in place:
- If the Advance Decline Line (ADL) indicator moves to fresh lows in line with price, market is considered to be weak, as such a broader reflection of declining prices.
- If the #!DivStochv5 indicator forms red histograms and its line changes its to color to blue, price is considered to be bearish, as such a sell is advised.
Stop Loss for Short Entry: Place stop loss above short-term resistance.
Exit Strategy/Take Profit for Short Entry:
The conditions or rules for exiting or taking profit on position(s) is as follows:
- If the Advance Decline Line (ADL) indicator begins to rise, it is an indication that price gaining momentum to the upside or as they’ll put it, price is showing strong participation that is bullish.
- If the color of the #!DivStochv5 indicator turns dark green, while its line also changes to yellow, it is an indicators of upward pressures, as such sell position(s) should be closed.
Sell Trade Example
About The Trading Indicators
The Advance Decline Line (ADL) indicator gauges the degree of participation in a decline or an advance.
It is said to be in a strong bullish participation when the AD line surges and records new highs, while it is in a strong bearish participation when the AD line dips to fresh lows along with the underlying asset.
The #!DivStochv5 custom indicator is a momentum indicator that associates an currency pair’s closing price to its price range over a stated time frame. #!DivStochv5 trails momentum or speed of price.