Learn how to use the ADX crossover strategy with the ADX indicator to maximize your profits by avoiding common trading mistakes. It’s a simple and profitable strategy that can be used on all time frames and involves using various indicators to filter out fake market signals. By following the step-by-step instructions provided, you can increase your winning ratio to at least 70%.

The Best Trading Strategy Using ADX Indicator: ADX Crossover

Introduction

Trading is a challenging endeavor, and every trader is always on the lookout for reliable and profitable strategies. One of these strategies is the ADX Crossover, which is based on the ADX Indicator. However, most traders misunderstand this strategy, leading to costly losses. In this article, we will reveal the correct way to use the ADX Crossover strategy, step-by-step. We will also enlighten you on how to increase the winning ratios of this strategy for maximum profitability.

Understanding the ADX Crossover

The ADX Crossover strategy is a simple and popular trading strategy, whose execution involves taking advantage of the ADX Indicator’s crossing points. This strategy focuses on the trendline, price action, and momentum in the market. One of the major causes of losses when using this strategy is trading every time the ADX line crosses. The key to mastering this strategy is learning when to buy or sell using the indicator crossing points.

Setting Up the Strategy

To set up the ADX Crossover strategy, you need to open the tradingview.com website and select the GBP JPY currency pair. Set the time frame to five minutes, although you can use this strategy on any timeframe to get maximum profitability. The strategy can also be adapted to work on any currency pair. Next, you need to add two indicators, the ADX and the Binary Pro 3v2 final strategy for increased profitability.

Step-by-Step Execution

To execute a buy trade using this strategy, you should first check the Blue line of the ADX indicator, looking for it to cross the Orange line from the bottom to the top. Confirm that the Bollinger Band is also on an upward trend, and that the market price is above the Red line. Once you have confirmed these indicators, execute a trade on the next candle that touches the Red line, preferably when a positive price action is created.

For a sell trade, check the Orange lines of the ADX indicator for them to cross the Blue line from top to bottom. Next, confirm that the Bollinger band is on a downward trend, and that the market price is below the Red line. Again, wait for the next candle that touches the Red line and execute a sell trade preferably when negative price action signals are observed.

Increasing Profits with Stop Loss

To increase the profitability of the ADX Crossover strategy, you need to incorporate stop loss orders into your trades. After identifying an opportunity for a buy trade, set a stop loss at the yellow line to minimize potential losses. Also, have a profit target based on the market’s movement. In case of a sell trade, set the stop loss at the yellow line and move it downwards as the market moves in your favor. You can book profits in two ways;

– When the market reaches the profit target
– By trailing your stop loss by moving it just above the market price action, to keep your profits running and avoid swift pullbacks.

Conclusion

The ADX Crossover strategy is one of the most straightforward trading strategies that you can use to make a profit in the Forex market. However, you need to master the skill of choosing the right entry and exit points. By adding stop loss orders, you can minimize potential losses and increase profitability. Remember to be disciplined, diligent, and follow the strategy guidelines to achieve maximum profitability.