ADX & OBV Trading Strategy

OANDA:EURGBP   Euro / British Pound
There is a nice combination of two indicators that will help traders at minimum to confirm their set up and maximum, with a lot of discipline, use it as a strategy and trade effectively.

Average Directional Movement (ADX)
This lagging indicator will measure the strength of "Trending Market". It's at its most effective, when you use it with Up trend or Down trending market. It will measures between 0 to 100.
Since it's lagging Oscillator, it will be the best to combine it with another indicator that complement it at its best.

On Balance Volume OBV
This indicator will measure the direction of the market like "Simple Moving Average SMA".

Here is the suggested set up.

ADX Set up and analysis.
ADX Line: Blue
DI+: Green
DI-: Red
25 Line: Gray

1- When ADX line (Blue) goes above 25 line (Gray dotted line) signals the strong Bullish or Bearish move in the price.
2A- When DI+ (Green) cross Up the DI- (Red) it signals the Bullish move.
2B- When DI+ (Green) cross Down the DI- (Red) it signals the Bearish move.

***** You must use both ADX signal and DI+ signal, for the best result. *****

OBV set up and analysis,
SMA: Blue
OBV: Red & Green depending on the direction or you can use one color only. It's up to you. This is not so important.
Set the SMA to 100
When SMA cross up OBV line, signals Bullish and when SMA cross down, It signals Bearish move.

I would strongly suggest to combine these two indicators to confirm your price set up. In the end of the day, Price set up is the most important indicator and source of truth.

Good luck,


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