This article introduces you to a trading strategy that doesn’t require volumes, technical indicators, and price patterns. All you need to do is to be attentive to the price action. Welcome to the Imbalance tutorial.
ADX Trend-Based Strategy
2023-04-21 • Updated
Trend strategies are good - they may give significantly good results in any time frame and with any assets. The main idea of the ADX Trend-Based strategy is to try to catch the beginning of the trend.
Indicators: Average Directional Movement Index (ADX), Parabolic SAR with the default settings.
Detrended Price Oscillator (DPO) with a 0 line level.
ADX is a trend indicator that consists of three lines. +DM and -DM compare prior highs and lows and the ADX, which measures the difference between them. ADX line itself is not used in this strategy. When the +DM line is higher than the -DM line, the trend is bullish; otherwise – bearish. The intersection of lines gives signals to buy or sell.
Detrended price oscillator helps eliminate the trend to find price cycles. It fluctuates around zero level. When it crosses its zero line – it gives a signal to trade.
Risk management rules: Fixed trade volume with 0.1 lot.
Rules for a long entry
- Wait for the DPO to cross the Zero line up.
- Simultaneously, the +DM line should cross -the DM line up.
- Parabolic SAR should grow.
It is recommended to use the Stop Loss at the level of the nearest local minimum before receiving the signal.
Rules for a short entry
- Wait for the DPO to cross the Zero line down.
- Simultaneously, the +DM line should cross -the DM line down.
- Parabolic SAR should fall.
It is recommended to use the Stop Loss at the level of the nearest local maximum before receiving the signal.
Rules for a Take Profit
- The choice of Take Profit is possible based on the ratio 3:1, i.e., a trade should bring 3 points of profit for one lost profit point.
- The trade may be closed when Parabolic SAR reverses and starts moving into the opposite direction.
Trade with FBS using Detrended Price Oscillator and ADX indicator and become a true professional!
How to open an FBS account?
Click the ‘Open account’ button on our website and proceed to the Personal Area. Before you can start trading, pass a profile verification. Confirm your email and phone number, get your ID verified. This procedure guarantees the safety of your funds and identity. Once you are done with all the checks, go to the preferred trading platform, and start trading.
How to start trading?
If you are 18+ years old, you can join FBS and begin your FX journey. To trade, you need a brokerage account and sufficient knowledge on how assets behave in the financial markets. Start with studying the basics with our free educational materials and creating an FBS account. You may want to test the environment with virtual money with a Demo account. Once you are ready, enter the real market and trade to succeed.
How to withdraw the money you earned with FBS?
The procedure is very straightforward. Go to the Withdrawal page on the website or the Finances section of the FBS Personal Area and access Withdrawal. You can get the earned money via the same payment system that you used for depositing. In case you funded the account via various methods, withdraw your profit via the same methods in the ratio according to the deposited sums.