ADX and DMI Indicator
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  1. #1
    Join Date
    Dec 2006
    Posts
    2

    Default ADX and DMI Indicator

    hi to all,


    can someone point me out how to interpret ADX and DMI indicator?


    thanks in advance

  2. #2
    This should give you a good start: http://www.babypips.com/forexpedia/index.php/ADX

  3. #3
    DMI summarizes trend movement, either up ( +DM ) or down (-DM)

    ADX tells you if the market is trending or not. When the ADX line is moving up a trend is getting strong, as the line flattens or drops, it usually means that the trend is getting weak and may be ready to reverse.

  4. #4
    ADX makes a good trend detection tool. So if youíre looking to find a new trend you want to make sure that the ADX line is rising

    Peace

  5. #5
    Join Date
    Dec 2006
    Location
    Norristown, PA
    Posts
    450
    +DI has to cross -DI going up to signal a bullish trend or vice versa for a bearish trend. I love using ADX in conjunction with RSI to buy on dips in a strong trend. Essentially when RSI falls below 70 and turns back up and ADX is above 40 (strong trend) then you can buy on the dip since the trend will most likely resume. The same holds true in a downtrend when ADX is rising above 40 and RSI goes above 30 and turns back down then you can buy the dip before the downtrend resumes. There are many good articles written on this if you google ADX and RSI.

    Quote Originally Posted by piplicious View Post
    DMI summarizes trend movement, either up ( +DM ) or down (-DM)

    ADX tells you if the market is trending or not. When the ADX line is moving up a trend is getting strong, as the line flattens or drops, it usually means that the trend is getting weak and may be ready to reverse.
    Last edited by topgun; 12-15-2006 at 11:56 AM.

  6. #6
    Join Date
    May 2009
    Posts
    18
    I am building a system relying on DMI Cross + ADX >=20 but am not sure abt the exit rule.

    How about exit when EMA 3 cross above/below EMA 10?

    Comments please

    Thx

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