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In this Forex video tutorial, we will combine the ADX and Awesome Oscillator Indicator.
So let’s get right to work.
First thing we want to look at is the ADX.
It has to be above the Zero line.
When we have that, we have passed the ADX criteria.
It’s a buy signal from the ADX.
At the same time, we look at the black line from the Awesome Oscillator to make sure that it’s also moving upwards passing the 30 level.
And we will also look at the resistance level.
We never want to enter into a long position when the price bar is still below the resistance level.
This rule of thumb holds true in all of our approach.
So if price is above resistance level (which means price is now above support level) then we have another confirmation.
For short position the same applies.
First we look at the ADX to be in the red or below the Zero line.
And we want to see the black line of the Awesome Oscillator moving past the 30 level.
Lastly, we look for the price bar to be below the resistance level or breaking past the support level.
Take note that it’s not always that all indicators are aligned at the same time.
Sometimes, the ADX has triggered but the Awesome Oscillator has not move past the 30 level.
If so, then it’s best to wait for the Awesome Oscillator to trigger as well.
And when the Awesome Oscillator triggers, it’s wise to see how far the ADX has moved.
As guidance, we do not want the ADX to be beyond 3 bars because we want to be in position at the start of the trend.
We do not want to be in position when trend has been going on for many sessions.
As always it pays to be patient.
Not all triggers means that you have to be in position.
In truth, cash is a position too.
With this strategy out of the way, see you in the next video.
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