This simple trading strategy can be applied to any instrument on any time frame. This strategy using two ocillator, ADX with 16 period setting and MACD setting of 3, 9, 16. Some say that a trend indicator alongside an oscillator is the most efficient combo.
Any of these three pair suits the strategy: EUR/USD, GBP/USD, AUD/USD. Experienced traders/investors stick to these ones because majors have more predictable behavior, and tech analysis works much better on them. Recommended time frame should be on shorter period.
To open a position, start by analyzing the activity of ADX with period
16. Make sure you choose correct settings when adding the indicator to
the trading terminal.
Signals in the strategy do not differ from "classic" ADX signals. As you
know, the author claims that a crossing of +Di and -Di as it is already
gives a market entry signal. For example, if +Di crosses -Di from
below, this is a signal to buy, and if -Di crosses +Di from above, this
signals to sell.
+Di and -Di show the difference between today's and yesterday's high and
low. So in the first case, when +Di goes up, the trend must be
ascending because today's highs are higher than yesterday's. Hence,
buying is the best option in such circumstances. Meanwhile, when -Di
values go down, we can conclude there is a bearish impulse and get
prepared for selling.
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