How to use fibonacci retracements forex trading

This ADX Swing Trading Strategy is based on the ADX Indicator. The ADX indicator measures the strength of a trend and can be useful to how to use fibonacci retracements forex trading if a trend is strong or weak. ADX will not tell you if the trend is up or down-it just tells you the strength of the current trend, whether it be uptrend or downtrend. High readings indicate a strong trend and low readings indicate a weak trend.

When this indicator is showing a low reading then a trading range is likely to develop. Avoid trading currency pairs with low readings! You want to be trading pairs that have high readings. Trying to trade according to these two lines is your surest way to lose money-and its even more confusion.

The only thing that we are concerned with is the ADX  indicator itself. In the chart above, the ADX indicator is the blue line . The area in the brown rectangle box shows how this indicator identifies trading ranges and times when the market is not trending. The ADX is showing a low reading and notice that the currency pair is trending sideways.