What is the ADX indicator?
The ADX indicator is used to determine the strength of a trend of a given stock or commodity in the open market. It might be used as a confirming indicator or help to give you early warning signals that a trend might be coming to an end.
You should not use the indicator to give you buy and sell signals. It is intended only to show you how strong the current trend is. You should also realize that a high number on the ADX indicator does not mean the stock is heading up. It might signal a strong bullish trend or a strong bearish trend, which is why you should always look at price action first. Traders will often use this indicator as a way of confirming that they are trading on the right side of the trend. They will then use their own rules to determine if it is worth trading the stock or not. Other Oscillators You can combine many different oscillators together to get a good idea of how strong a company it. However remember that using too many oscillators can mean that you will never enter a position because there is no perfect trade. Here are some other oscillators. Rate of Change - This looks at the price patterns of a stock. Chande Momentum Oscillator - This can be used to determine the trend of a security. MACD - This is a popular overbought/oversold indicator. |
