Advanced ADX Forex Trading Strategy

The advanced ADX forex trading strategy is a trading strategy that combines the brilliance of the advanced ADX, ADX Candles custom indicator and Moving Averages (14) MT4 indicator.

The strategy transforms your chart into being color happy, asides being a good pips generator.

Chart Setup

MetaTrader4 Indicators: Advanced_ADX.ex4 (default setting), ADX Candles.ex4 (default setting), Moving Averages (14)

Preferred Time Frame(s): 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours

Recommended Trading Sessions: Any

Currency Pairs: any pair

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Buy Trade Example (Click the image for full size)

advanced-adx-forex-trading-strategy

Fig. 1.0

Strategy

Long Entry Rules

Enter a buy position when the following chart patterns are in display:

  1. If the Advanced ADX custom indicator forms green histograms within its indicator window, it indicates a bullish signal.
  2. The ADX Candles custom indicator fills the candlesticks, and as such a green colored candle denotes a bullish signal.
  3. If price bars opens and closes above the violet line of the Moving Averages (14), we should be ready for some upside pressures i.e. bulls market.

Stop Loss for Long Entry: Place stop loss below the violet line of the Moving Averages (14), in line with an effective money management strategy.

Exit Strategy/Take Profit for Long Entry

The following rules or conditions will define an exit or take profit strategy:

  1. If over 3 consecutive histograms of the Advanced ADX custom indicator turns red, it is a reversal signal.
  2. If the red colored ADX Candles custom indicator forms over 3 consecutive candles, it is a signal prompting us to take profit or exit accordingly.
  3. If the candlestick closes below the violet line of the Moving Averages (14), it corroborates our exit or take profit stance.

Sell Entry Rules

The following rules or conditions will define a sell entry:

  1. If the Advanced ADX custom indicator forms red histograms within its indicator window, it denotes a bearish signal.
  2. The fill color of the ADX Candles custom indicator is red, signaling a bears market.
  3. If price bars opens and closes below the violet line of the Moving Averages (14), we advise a sell.

Stop Loss for Sell Entry: Place stop loss above the violet line of the Moving Averages (14), in line with an effective money management strategy.

Exit Strategy/Take Profit for Sell Entry

  1. If over 3 consecutive histograms of the Advanced ADX custom indicator turns green, it is an exit or take profit trigger.
  2. If the green ADX Candles custom indicator forms over 3 consecutive candles, it is an exit or take profit trigger.
  3. If the candlestick closes above the violet line of the Moving Averages (14), it is one of the strategy’s condition for an exit or a take profit (refer to Fig. 1.1).

advanced-adx-forex-trading-system

Fig. 1.1

Free Download

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About The Trading Indicators

The Advanced_ADX.ex4 custom indicator is an oscillator built on the ADX technical studies. It uses colored histogram bars to depict buy and sell signals (green and red colored histograms respectively).

The ADX Candles.ex4 custom indicator on the other hand superimposes its color on the candlesticks, giving clear information on bullish (green) and bearish (red) candlesticks.

The Moving Averages (14) is a standard trend following indicator that offers weight to the most recent data.

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