Forex trade is a very risky business if you don’t know what you are doing, some people just trade based on signals from their friends, why not know how to generate these signals yourself? You can first practice with a combination of three or more indicators, now I will explain how to use some of them. First the ADMI, this simply means average directional movement index, this is a technical tool that can be used to read the market of a currency pair in forex trading. The ADMI consists of three different tools, the DI+, the DI- and the trend line, the trend line can be seen when you click on the third from last icon at the top of your Meta 4 platform and open the ADMI and then click on parameters, set it from a range of from 0 to 100. The DI- and DI+ can be seen from clicking on colors on the ADMI software. You can change the colors for each to your desired colors. You can decide to make the DI- blue and the DI+ yellow, note this color, and make sure you memorize it.
The trend line is used to determine the strength of the market, if the trend line is below 20, then it means that the market is slow, the market being slow can affect your trade negatively most of the times because it will take a longer time for the market to follow a signal, but if it is between 20 and 40 then it is ok, but above 45 is bad except you take your trade towards the end of a candle stick if it has gone against the signal and the signal is still right. Usually it is advisable to use a 1 hour chart, so after 45 minutes on a candle stick formulation, and the trend line is high, also the market has gone against its signal, there is a higher tendency for it to retrace.
The DI+(positive line) and DI-(negative line) are used to read the market or determine its signal, when ever the positive line cuts the negative line from beneath, a strong buy signal has been established and when the negative line cuts the positive line from beneath then a strong sell signal has been established. Also when the positive live goes up, it means that the market is buying or there is an upward trend and also when the negative line points upwards there is a downward trend, if you are using a one hour chart, ensure to study and enter all your trades at most 40 minutes into the formulation of a new candle stick.
With the above you can study the market well, but to be sure you can add other indicators like RSI, Stochastic, Zigzag and others, first practice with them so you can understand how they work. Now the best time to go with a signal generated from a technical indicator is in the morning before 9am London time and in the evening after 8pm London time, during this period there won’t be any news that will affect the trend negatively.
The post How and When to Use the ADMI Forex Indicator to Maximize Profit appeared first on Big Financial BLOG.
source http://blog.bigfinancial.co.uk/how-and-when-to-use-the-admi-forex-indicator-to-maximize-profit/
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