How to Use ADX, CCI and William% Forex indicators with your forex trading .I will discuss all main point in this article.
Use ADX, CCI and Williams Indicators in Forex Trading
All indicators are available in forex mt4 platform. Indicators will help you to understand the Forex market uptrends or downtrends
What is ADX?
Forex indicators used to measure the share strength of a stock in technical analysis is the Average Directional Index or ADX. ADX determines how much power the stock is moving forward with. That is, ADX is a non-directional indicator that determines the strength of the up-trend or down-trend of a stock by numbers.
Who discovered Forex ADX Indicators?
The concept of the first ADX was introduced in the book ‘New Concepts in Technical Trading Systems’ by Welles Wilder. Wilder created the tool to measure the level of the previous day’s trading range with the one-day trading range of the stock.
Trend is considered a friend in forex market. Traders can benefit from a strong trend if it is predicted before it emerges. The challenging thing in this case is to get into the trend at the right time and get out of the trend.
How to determine in forex market strong trends with ADX Indicators ?
ADX always expresses positive values. Strong trends are determined by large numbers and weak trends by small numbers. If the value of ADX is more than 20, then the trend is considered strong. If ADX is more than 20 then you have to see if the stock is in up-trend or down trend. Knowing the nature of the trend makes it easier for a trader to make business decisions.
Conversely, if the value of ADX is below 20, the trend is considered weak.
How to Use CCI Forex Indicators?
The Commodity Channel Index (CCI) indicator, developed by Donald Lambert, was first published in Commodity Magazine in 1960. Trends and extreme conditions can be determined using the indicator. Initially designed for the commodity market, it is now widely used in the Forex market. CCI basically measures the current price of the shares along with the average price. CCI is relatively high when the current price of the stock is higher than the average price and CCI is relatively low when the current price is lower than the average price. Moreover, overboat / oversold condition can also be diagnosed with CCI.
CCI Indicators Full Explained :
In most cases, the CCI fluctuates between -100 and +100. However, the indicator may not be limited to +100 and -100. CCI refers to the bullish state when it is positive and the bearish state when it is negative. Zero line crossover can be used to diagnose positive or negative status. Moreover, when CC goes above +100, it means that the stock is going up-trend with enough strength. Conversely, when the indicator goes below -100, the stock appears to be extremely weak. Since the indicator has no upper and lower limit, it is a bit difficult to diagnose overbought and oversold conditions. CCI is generally considered to be +200K overbought and -200K oversold.
How to Use William% R Indicators?
William% R is a momentum indicator. It is also called% R indicator. It contains the opposite properties of the fast stochastic indicator. Fast stochastic indicators and% R create the same line but their scale is different. William% R fluctuates from 0 to -100 (negative). Conditions from 0 to -20 are considered overbought and conditions from -60 to -100 are considered oversold.
Forex Indicators William% R Center line:
50K is considered as the center line. The line is compared to 50 yards on a football field. If a team crosses 50 yards and goes ahead, the chances of that team scoring a goal increase, and conversely, when the opponent moves 50 yards ahead, the chances of scoring a goal increase. Similarly, just above the William% R-50 line means the stock is trading above the high-low range and below the -50 line means it is trading below the high-low range.