ADX and RSI Indicator

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In this video tutorial, we will ADX and RSI Indicator for a decent buy/sell Forex Strategy.

Remember, we show you different combinations with the ultimate goal that you can eventually mix and match your own strategy.

Of course, if you want to use our strategies…that’s all fine and dandy too.

But the most important is to focus on the learning process and to understand how we mix and match these indicators together.

Let’s recap on the RSI indicator.

The key levels are 20 and 80.

These are the oversold and overbought levels.

If it hovers around these level (moving sideways), the RSI is trying to tell you that the market is overbought or oversold and a reversal might be coming.

If the RSI just touches the 20 level and turns back up, that is not an indication of oversold.

When you see that the RSI is moving sideways after touching the crucial levels, then you know that the trend is on borrowed time.

The longer it moves sideways… the more likely a reversal is coming.

So here’s the strategy play… let’s use short position as an example…

1. We want to see that the RSI has been hovering above the 80 level for some time.

2. When it turns, we want to see it penetrate below the 50 level.

3. With 1 and 2 fulfilled, we move to the ADX line.

4. We want to see the ADX black line above the 30 level and we want to see a cross over between the negative directional and positive directional line. The Red line is crossing above the Green line.

When these criteria are filled, then we get into position with confidence.

Just know that with this strategy, it does not trade often but when it does, it’s well worth your wait because it’s designed to catch major reversal… especially after a long trend (up in this example).

For long position, it’s the same…

1. We want to see that the RSI has been hovering below the 20 level for some time.

2. When it turns, we want to see it penetrate below the 50 level.

3. With 1 and 2 fulfilled, we move to the ADX line.

4. We want to see the ADX black line above the 30 level and we want to see a cross over between the positive directional and negative directional line. The Green line is crossing above the Red line.

And we move into position for buy.

Solid strategy but requires you to stay patient.

It’s better to be a Sniper trader than an active trader that does not generate consistent profit.

Hope you have enjoyed this powerful reversal strategy.

See you in the next video…