55# ADX filtered 21 SMA Trading System
Submit by joy 22
Pairs: Eur/USD, GBP/USD, AUD/USD
Time Frame:15 and higher
A selling cross takes place when -DI crosses over +DI and a buying sell takes place when +DI crosses over –DI. Remember, crosses are always read downside up and never in the opposite direction. The ADX line acts as filter, as if above 25.
Fake signals happen as in all: when the indicator immediately gives a contrary
signal, meaning you have to leave your current trade, and go in the opposite direction, that’s a warning to stay aside of the pair, until we have clearer definitions.
To filter this fake signal, a good and simple supplement to the chart is a 21 SMA (green): locate price action in relation to the SMA: if price is above SMA in a buying sign, or under SMA in a selling sign, chances of succeeding again increase. On contrary side of the MA market will be warning you that the price is not yet ready to rally.
Long Entry: D+>D- , ADX(14) >25 and price>SMA (21).
Short Entry: D->D+ , ADX(14) >25 and price<SMA (21).
In the picture below ADX filtered 21 SMA Trading System in action.
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