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How to make Money in stock Market with Adx indicator

The AVERAGE DIRECTIONAL INDEX (ADX) indicator

The black line (Adx), Positive directional indicator (Green line), and negative directional indicator(Redline).
                  
  The average directional indicator is an oscillator and also called a leading indicator.
J. Welles Wilder developed the Average Directional Index (ADX) to
evaluate the strength of an ongoing trend, be it up or down. The average
directional index (ADX) is thus used to determine the nature of the market.
Once we know what type of market we are dealing with, we can select the
appropriate indicators for trading it.

How ADX works?

                     ADX is an oscillator that fluctuates Between 0 to 100, even though it fluctuates between 0 to 100, readings above 60 are respectively rare. ADX has two important strong areas to note, they are 20 and 40.
It also consists of two major directional movement lines.

Directional movement (DM)

Wilder has added directional movement
 indicator with ADX to take the probability of the indicator. The directional movement indicator has a positive directional movement(+DI)line and the negative directional movement (-DI)line.

Note: ADX does not indicate whether the trend is bullish or bearish, it conveys only the which trend is strong, either bullish or bearish. ADX only shows the strong trend either uptrend or downtrend.
You'll come to know how to take entries with the indicator.

What ADX indicates

  • When ADX line crosses above 20 the trend is strong (Bullish or bearish). 

  • When the ADX line reaches 40 and it indicates a weakening of the trend (bullish or bearish).

  • "BUY " When positive directional movement(+DI) line crosses above the negative directional movement (Red)line. 

  • "SELL" When negative directional movement (-DI)line crosses above the positive directional movement (Green) line. 
To get exciting offer on stock market books
Click the top right corner three lines and get your book 

Remember, the ADX indicator does not give you buy or sell signals. It
does, however, give you some perspective about where the stock is in the
trend. Low readings below (20) and
you have either a trading range or the beginning of a trend. Extremely high above (40) tell you that the ongoing trend is likely to come to an end.
  


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