Advanced ADX and Vigor Index Confluence Forex Trading Strategy

In trading, confluence pertains to having several strategies, signals, indications or trade setups that indicate that price is moving in a certain direction. There are several sources of indications regarding price that might be an element of a confluence of signals. It might be from a price pattern or candlestick pattern. It could also come from a crossover of price motion and a moving average line, or a crossover of two moving average lines.

Trading based on confluences might be one of the crucial effective ways to trade the forex market. It’s because trading based on confluences allows traders to trade with confidence knowing that there are several aspects indicating that price is moving in a certain direction fairly than making trade decisions based on a single signal.

Technical indicators are an important source of indications that could be used to support a confluence of signals, which might form a sturdy trading strategy or trade setup. It’s because technical indicators can objectively show a sign without second thoughts. The signals it produces aren’t subjective. Traders don’t have to second guess themselves whether or not what they’re taking a look at is indeed trading signal. Strategies using complementary technical indicators which help to discover several technical aspects can trade with a comparatively high degree of win probability, which is considered one of the essential aspects for a winning trading strategy.

Advanced ADX

Advanced ADX is a custom technical indicator which relies on the Average Directional Movement Index (ADX) indicator.

The classic ADX indicator makes use of positive and negative Directional Movement (DM) lines. Crossovers between the +DM and -DM are identified as a sign of a possible trend reversal. It also computes for the strength of the trend based on the ADX line.

Although the classic ADX indicator could be very useful and effective, it may be confusing to recent traders.

The Advanced ADX indicator simplifies it by plotting bars based on its underlying interpretation of the ADX. These bars change color to point the direction of the trend. Green bars indicate a bullish trend, while red bars indicate a bearish trend.

Traders can use the changing of the colour of the bars as a signal for a trend reversal in confluence with other signals.

Relative Vigor Index

The Relative Vigor Index (RVI) is an oscillator sort of technical indicator which identifies trend and momentum based on an underlying mathematical computation of historical price movements.

The RVI plots two lines which oscillate freely around its median, zero. Positive lines generally indicate a bullish bias, while negative lines indicate a bearish bias.

Of the 2 lines, the faster moving line is coloured green, while the slower line is coloured red. Crossovers between the 2 lines may be interpreted as a momentum reversal. Green line above the red line indicates a bullish momentum, while red line over the green line indicates a bearish momentum.

Traders also can use these reversal signals in confluence with various divergences, whether hidden or regular. These indications can produce signals with the next probability.

3 MA Cross with Alert

3 MA Cross with Alert is one other custom technical indicator which is used to discover trend direction based on an underlying set of modified moving averages.

This indicator is a signal indicator which identifies trend direction based on the crossing over of multiple moving average lines. It then plots an arrow pointing the direction of the brand new trend as soon because it detects a trend reversal. Traders can use the arrows plotted as an entry trigger based on a trend reversal signal.

Trading Strategy

Advanced ADX and Vigor Index Confluence Forex Trading Strategy is a straightforward trend reversal strategy based on a confluence of the above-mentioned technical indicators.

First, the three MA Cross with Alert indicator should plot an arrow pointing the direction of the brand new trend. Nevertheless, these signals may sometimes be too early and might need more confirmation.

Advanced ADX indicator should confirm the trend reversal by changing the colour of the bars corresponding to the direction of the brand new trend.

Lastly, the RVI oscillator lines should crossover confirming the direction of the brand new trend.

Confluences between these signals which are closely aligned could be used as valid trend reversal signals.

Indicators:

  • 3_MA_Cross_w_Alert_v2
  • Advanced_adx
  • Relative Vigor Index (default)

Preferred Time Frames: 30-minute, 1-hour, 4-hour and every day charts

Currency Pairs: FX majors, minors and crosses

Trading Sessions: Tokyo, London and Recent York sessions

Buy Trade Setup

Entry

  • The three MA Cross with Alert indicator should plot an arrow pointing up.
  • The Advanced ADX bars should change to green.
  • The green RVI line should cross above the red line.
  • The RVI lines should cross above zero.
  • These bullish reversal signals needs to be closely aligned.
  • Enter a buy order on the confirmation of those conditions.

Stop Loss

  • Set the stop loss on a support below the entry candle.

Exit

  • Close the trade as soon because the 3 MA Cross with Alert indicator plots an arrow pointing down.

Advanced ADX and Vigor Index Confluence Forex Trading Strategy

Advanced ADX and Vigor Index Confluence Forex Trading Strategy 2

Sell Trade Setup

Entry

  • The three MA Cross with Alert indicator should plot an arrow pointing down.
  • The Advanced ADX bars should change to red.
  • The green RVI line should cross below the red line.
  • The RVI lines should cross below zero.
  • These bearish reversal signals needs to be closely aligned.
  • Enter a sell order on the confirmation of those conditions.

Stop Loss

  • Set the stop loss on a resistance above the entry candle.

Exit

  • Close the trade as soon because the 3 MA Cross with Alert indicator plots an arrow pointing up.

Advanced ADX and Vigor Index Confluence Forex Trading Strategy 3

Advanced ADX and Vigor Index Confluence Forex Trading Strategy 4

Conclusion

This easy trading strategy which relies on a confluence of multiple trend reversal and momentum signals are inclined to work thoroughly.

Trade setups, although not perfect, has the potential to provide high yielding trades with a comparatively high degree of win probability.

Traders also can use it in confluence with other indications coming from price motion, candlestick patterns, and bounces of supports and resistances.


Forex Trading Strategies Installation Instructions

Advanced ADX and Vigor Index Confluence Forex Trading Strategy is a mix of Metatrader 4 (MT4) indicator(s) and template.

The essence of this forex strategy is to rework the amassed history data and trading signals.

Advanced ADX and Vigor Index Confluence Forex Trading Strategy provides a chance to detect various peculiarities and patterns in price dynamics that are invisible to the naked eye.

Based on this information, traders can assume further price movement and adjust this strategy accordingly.

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Find out how to install Advanced ADX and Vigor Index Confluence Forex Trading Strategy?

  • Download Advanced ADX and Vigor Index Confluence Forex Trading Strategy.zip
  • *Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
  • Copy tpl file (Template) to your Metatrader Directory / templates /
  • Start or restart your Metatrader Client
  • Select Chart and Timeframe where you ought to test your forex strategy
  • Right click in your trading chart and hover on “Template”
  • Move right to pick Advanced ADX and Vigor Index Confluence Forex Trading Strategy
  • You will notice Advanced ADX and Vigor Index Confluence Forex Trading Strategy is obtainable in your Chart

*Note: Not all forex strategies include mq4/ex4 files. Some templates are already integrated with the MT4 Indicators from the MetaTrader Platform.

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