ADX Forex Trading Strategy For Metatrader 5

Trading in the direction of a strong trend minimizes risk and ramps up potential for profits.

The ADX Forex Trading strategy For Metatrader 5 is using a combination of amazing technical indicators that can quickly spot when price is trending strongly.

Being able to spot a strong directional move is one very crucial skill that every trader must possess.

Irrespective of the category ( scalper, day trader, swing trader) that you belong as a trader, a strong move is needed after you enter a position.

Such a move must be in your favor for you to make a profit.

Lets see how we can achieve our financial goals trading this MT5 strategy.

Trade Setup 

MetaTrader 5 Indicators: Average Directional Movement Index.ex5 (Parameters Modified; Period=28), MinMax.ex5 (Default Setting)

Trade Style: Any (scalping, day trading, swing trading)

Trading Sessions: Any (London, New York, Tokyo)

Currency Pairs: Any (Majors, Cross and Exotic)

Platform: Metatrader 5 (MT5)

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Download the ADX Forex Trading Strategy For Metatrader 5

Buy Trade Example: GBPUSD, H1 Chart

Fig. 1.0

Trading Strategy Rules For Buy and Sell Trades Explained

Buy Entry

Enter a buy trade if the following trading conditions are met:

  1. If the ADX Metatrader 5 indicator line (light sea green) breaks above the 25.00 horizontal level as shown on Fig. 1.0, a strong trend is said to be developing and we’ll require directional confirmation from other indicator(s).
  2. If the medium sea green middle line of the MinMax custom indicator gets aligned somewhat below the candlesticks as indicated on Fig. 1.0, it is a plausible directional trend confirmation for a bullish signal, therefore a long entry is advised.

Suggested Stop Loss for Buy Entry: Place stop loss 3 pips below immediate support.

Suggested Exit Strategy/Take Profit for Buy Trade

Exit the buy trade if the following trading conditions are met:

  1. If while a bullish trend is running, the light sea green ADX indicator line dips below the 25.00 horizontal signal level as illustrated on Fig. 1.0, price is said to be entering a non-trending condition, therefore an exit or take profit is recommended.
  2. If the middle line of the MinMax custom indicator reverts to orange red while a bullish trend is running, a bearish reversal is said to be imminent, as such an exit or take profit is advised.

Sell Entry

Open a sell trade if the following trading conditions are met:

  1. If the light sea green line of the ADX forex indicator breaks above the 25.00 horizontal level as illustrated on Fig. 1.1, a strong trend is said to be developing and we’ll need extra directional confirmation from other indicator(s).
  2. If the orange red middle line of the MinMax custom indicator gets aligned fairly above the price bars as depicted on Fig. 1.1, the likely directional trend confirmation for the currency pair of interest is bearish, therefore a short entry is recommended.

Suggested Stop Loss for Sell Entry: Place stop loss 3 pips above immediate resistance.

Suggested Exit Strategy/Take Profit for Sell Entry

Exit the sell trade if the following trading conditions are met:

  1. If during a bearish trend, the light sea green ADX indicator line falls below the 25.00 horizontal signal level as exemplified on Fig. 1.1, price is said to be in a weak trend state, therefore an exit or take profit is duly advised.
  2. If the middle line of the MinMax custom indicator reverts to medium sea green during a bearish trend, bullish reversal is said to be in the offing, as such an exit or take profit stance will suffice.

Sell Trade Example: GBPUSD, H1 Chart

Fig. 1.1

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Download the ADX Forex Trading Strategy For Metatrader 5

MT5 Trading Indicators Used For This Strategy

The Average Directional Movement Index or ADX Metatrader 5 indicator is one that quantifies the strength of a trend.

The default period value is set at 14 bars, although other time periods can be used.

The MinMax indicator is used to describe the minimum and maximum construct of some price over a desired period, and such value can be used for further trend estimation.

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