Swing Trading Strategies – ADX Indicator Trading Strategy & Moving Average Strategy


– [Instructor] Welcome to the Swing Trading
Strategies video series. In this video we
will learn about ADX Indicator trading strategy that combines ADX Indicator
and moving averages. I’ve covered swing
trading in great depth and in case you landed
directly on this video do watch the remaining parts of Swing Trading Strategies series. Link to all of these
videos is given in the description box below. So by the time you’ve
finished this video you will have learned
how to use this simple ADX Indicator trading
strategy for swing trading. And how to apply this
strategy to identify high probability trades and
time your trades to perfection with well defined stop-loss. So what I’ll do is
I’ll take you through some basics of ADX Indicator, And will then show
you how to combine ADX Indicator and moving
averages together. This trading strategy
was first given out by Linda Bradford
Raschke who remains one of the most influential
trader of our time. And this particular setup
works exceptionally well. I will also show you
some modifications that you can implement in
order to enhance your return. In the end, I will show
you how to trade this setup by defining risk, entry,
stop-loss and exit. So let’s get started. So let us first begin with
the basics of ADX Indicator. Now ADX primarily is a
trend strength indicator. It’s mainly used to
determine strength behind a trending move. On a standalone basis as such, ADX Indicator does not indicate
the direction of trend. Now remember this
important point here, that ADX Indicator
only highlights the strength of the
underlying move. I hope this point is clear. So ADX is calculated based on moving average of
price range extension that is taken over
a period of time. If you’re interested in learning about ADX Indicator
construction and calculation there are plenty of resources
free and available on Google do refer the same for
calculations segment. So default parameter
for ADX Indicator is 14. However, traders can experiment based on their own preference,
and on experiences. Now when you plot the
ADX Indicator on a chart you’ll find two more
lines along with this, that is the positive DMI
and the negative DMI. Now DMI hear stands for
directional movement indicator. So positive DMI represents
positive direction of price, whereas negative DMI represents negative direction for price. Now when positive DMI is
above the negative DMI prices typically move up. And when negative DMI is
above the positive DMI, price usually moves lower. So I’ll just explain
this to you on a chart. So this chart that you
see in front of you has the ADX that
is plotted in blue, I hope it’s clearly visible. Positive DMI, that is directional movement
indicator positive, that is highlighted
here in green. And the negative DMI
is highlighted in red. I hope this much is clear. So here you have price along with 20 period
exponential moving average. And this is the NIFTY IT index. So in some instances you’re
seeing that positive DMI is greater than the negative
DMI and ADX is rising. Whereas in some
instances you are seeing that negative DMI is
greater than positive DMI and ADX is rising. So there are times when
ADX does not rise at all and hence that indicates
weakness of trend. In the chart in front of you whenever ADX is greater than 30, I have marked this 30 level
with the horizontal line, this is black line. So whenever ADX
is greater than 30 and positive DMI is
above the negative DMI, that suggests positive
momentum in price. Now if you look at this
point where ADX is above 30 and positive DMI, in green, is clearly above
the negative DMI, look how price trends upwards. So this is just one of
the application of ADX, and I’ll be coming to
the detail aspects of ADX once we start covering
this particular strategy. So before we move forward
it’s important to classify ADX Indicator into measurable parameters. That is, what qualifies
as a strong trend and what qualifies as a weak
trend with respect to ADX Indicator, and how to interpret the same. So this chart that you
see in front of you is the ADX Indicator and DMI
trend strength chart. If you want you should
take a screenshot of this particular chart as it will help you understand
this concept better. So when ADX is below 30,
that is between zero and 30, and positive DMI is
above the negative DMI, trend is naturally up, but the strength of
the trend is weak. Similarly, when ADX is below 30, that is between zero and 30, and negative DMI is
above positive DMI, then trend is down but the
strength of the trend is weak. So trend is typically strong
when ADX is between 30 and 50, and it is very strong when
ADX is between 50 and 80. I hope this particular
point is clear. Now once ADX starts
rising above the 80 mark, that is between 80 and 100, avoid considering it and
wait for it to cool off as it suggests excess in
trend over short-term. I hope this point is also clear because this is
extremely important. So the regions that
you have to target for this particular strategy
is between 30 and 50. And you have to hope that
you catch on to such a trend where ADX moves from 30 to 80. That is when you will
make maximum money in this particular strategy. So let us know quickly
move to the ADX system suggested by Linda
Bradford Raschke. From here on I’ll be
referring to her as LBR. So again this trading
strategy based on ADX that I am going to explain is that of Linda
Bradford Raschke. And I will suggest some
changes as well to this once you understand
the trading strategy, but this I will take
up towards the end. So this is an extremely
simple trading strategy which works exceptionally
well for swing trading. Now LBR recommends using ADX Indicator 14 and 20 exponential
moving average for this particular
trading strategy. The timeframe that she
recommends is daily timeframe. And for swing trading she
recommend selecting only those stocks whose ADX Indicator 14 is
greater than 30 and rising. So let us now move to how the trading strategy
is setup on charts, and what are the rules for this
particular trading strategy. So this chart that you
see in front of you is the daily time frame
chart for Yes Bank futures. On the chart we have a 20 period
exponential moving average. The rules for this particular
strategy are as follows. Rule number one, ADX Indicator
14 on daily timeframe has to be above 30 and rising. Rule number two, look for
a retracement of price towards 20 day exponential
moving average. Now while retracement
is happening ADX Indicator (14) may experience some dip, that is, you see here
ADX Indicator is heading down while being above 30. Now, this is totally fine. Rule number three, when
price touches the 20 EMA, look at this candle here,
it is touching the 20 EMA, buy next day or on the
following sessions, where high of this candle
which was touching the 20 EMA, is crossed. I hope this particular
point is clear because it’s a very simple rule. Again I’ll repeat. Rule number three is wait
for price to pull back to 20 day exponential
moving average, and once a candle touches this 20 day exponential
moving average, take the high of the candle,
draw a horizontal line, and wait for this high be
crossed in subsequent candles. As soon as this high is
crossed you enter the trade. With stop-loss, that
is rule number four, being the recent swing high. Now the stop-loss section
I will be covering up later in examples, because
it is kind of subjective. But this is what LBR recommends. So again these are
the four basic rules for this trading strategies. These are really
easy to understand, and you will be amazed
with how this works for swing trading. Now I’ll explain this a
bit more on price charts, and then I will walk you
through with a complete example for this particular
trading strategy. So this is the price chart
of the previous example, I just expanded the price
section and removed the ADX Indicator part for ease of understanding. Now I have marked out
two trading setups based on this
particular strategy. So each time that price that
it’s candle touches 20 EMA go long in the
subsequent sessions if high of the candle is crossed. So these two candles
that are marked here, these are the ones
that touch the 20 EMA. And what I’ve done is I’ve
expanded this section here, and I have expanded
this section here so that you can
understand this better. So once we have this criteria, that is candles
touching the 20 EMA, what we have to do is just
draw a horizontal line here right across the high prices. And when price crosses
it in subsequent session we just enter keeping the
recent swing as stop-loss. Now for this particular setup,
this would be the stop-loss. And here, this is the
same candle as this one, which touches the 20 EMA, and once this happens you draw a horizontal line
across the high. And when the high is crossed you enter the trade with
this being your stop-loss. So in the slides ahead I
will explain one example as it plays out on a
daily timeframe chart. So this is the exact same setup on the short side of the market. Now rules for this
trading strategy, as a short selling
strategy, are as follows. Rule number one, ADX Indicator
14 has to be above 30. Rule number two,
when price is below the 20 exponential
moving average, wait for the
retracement to happen till 20 exponential
moving average. Rule number three,
when price touches the 20 exponential
moving average, short sell next day, or
in subsequent sessions, if the low of the candle
that touches 20 EMA is crossed on the downside. And rule number four
is the stop-loss, that stop-loss for
short selling would be the recent swing
high that is formed. So if you take this
particular case here there are three, four setups
that are formed on the chart. If you look at this
particular setup, this is the candle
that has touched the 20 exponential
moving average, so what you do is you
draw horizontal line across this candle. And as soon as next day, the low of this particular
candle is breached, then you enter the trade and put a stop-loss at
this particular swing high. Now if you’re a
conservative trader you can use this
particular swing high. And if you’re an
aggressive trader you can use the
major swing high. Again, I’ll explain
these concepts in the particular example. So let me show this
on price chart alone. So as shown on the chart each time candle touches the
20 exponential moving average, mark out the low point of
the candle that touches the exponential moving average. And if on subsequent
days low is crossed, open a short trade with the
recent high as stop-loss. So if this seems
confusing do not worry, just stay with me as the next
few slides I will show you how this is done with
a particular example on a daily timeframe chart. So let us now
understand the rule of exponential moving
average in this strategy. So this ADX Indicator trading
strategy by LBR uses a exponential moving
average to identify the trend. I would actually
recommend the same thing because exponential
moving averages stay closer to the price. Now prefer only those stocks where 20 period
exponential moving averages is moving up, that is if you
want to trade on the long side. And prefer only
those stocks where exponential moving average
is moving down with price if you wanna go short. So if you wanna experiment
with moving average parameters you definitely can. Now there are traders to prefer something like a
21 period average, or a 34 period average,
and this is totally fine. However, I would strongly
recommend that do not use a 50 EMA or a hundred
exponential moving average as this will result
into fewer trades by this particular strategy. Now remember one thing
that you are essentially looking to trade the
pullback in this strategy. And number of time
stock pulls back to a 50 or 100
exponential moving average is far less than number of times a stock typically pulls back to a 20 period exponential
moving average. So I hope this particular
point is clear. Now as far as
timeframe is concerned, only use daily timeframe. On daily time frame use a 20
day exponential moving average. Now these were the parameters that were given by LBR herself. So avoid using this
particular strategy on a shorter timeframe as
this would lead to whipsaws on long or short side. Now as a golden rule
I would suggest that avoid stocks where trend
is not clearly visible. This would actually
include those stocks that are clearly in
a well-defined range. So best time to
trade this strategy is when stock is breaking
out into a trend, after a period of consolidation. I’ll again come to this part
towards the end of this video. So let me now come
to stock selection for this particular
trading strategy. Now LBR recommends stocks that are exhibiting
uptrend or downtrend, that are clearly identifiable
with ADX Indicator 14 greater than 30. Now this is the core
selection criteria for this particular
trading strategy. Now remember one thing,
you are swing trading here and you want to
maximize your profits with the next swing in market. Therefore, I think it makes
sense to select stocks that are more prone to
swings in the market. And in my opinion, these stocks
would be high beta stocks with beta value
greater than 1.3. Now high beta stocks
are more prone to swings making them an excellent choice for any swing trading strategy. If you recollect,
in this particular Swing Trading Strategies
I have highlighted the importance of high
beta and swing trading many a times in my videos. So you can get a list
of high beta stocks if you are using a software
like Amibroker or Metastock. In case you don’t
have these softwares I have posted the beta
code for TradingView.com in the comments section below. And you can use the same to
identify high beta stocks. So let me now take
you through an example of executing this
trading strategy where I will be
showing you how to approach this on a daily basis. So before we move forward
in this particular strategy, keep two specific things in
mind about the candle structure that I’m going to show you
for this trading strategy. This that you see here, these
are long wicks of candle. Now whenever you see
long wicks on the upside think resistance. Now this that you see here, these are long tails of candle. Whenever you see this
think in terms of demand. Now these two basic concepts
will come in handy going ahead as lot of price action analysis with respect to this strategy depends on wicks and
tail of a candle. So this chart that you
see in front of you is of JSW futures. Now based on the ADX Indicator trading
strategy that we have discussed let me now show you
how this strategy needs to be implemented
on a daily basis. I have handpicked this
perfect example for you that played out in October 2018. Such clean structures
don’t exist always, but to give you
hands-on experience of how to think in this strategy I will have to use this example. I will also acknowledge that
while explaining you things, I have the benefit of hindsight. So ADX Indicator for this particular
stock is above 30, this signifies trend
strength is strong. Also note negative DMI
here, that is in red, is clearly above
the positive DMI. and therefore trend is
strong on the downside. I hope this categorization
of ADX Indicator , negative DMI and positive DMI is
now clear to you. You also need to see that price is below the 20
exponential moving average. And the candle which
took price below the 20 exponential
moving average is a wide range candle with fairly negative
closing for the day. Now based on the entry
method that we discussed, we will now wait for a
candles high to touch 20 exponential moving average, and will then wait for
the low of this candle to be breached. I hope this particular
point is as clear as well. Now stop-loss again would
be the recent swing high. So in this chart we see that
second day gets completed with price below the 20
exponential moving average. If you look at the
candle here that has got completed again
selling pressure at higher levels
is clearly visible, look at the wicks,
that is long wicks, of this particular candle. Also it’s clear that
price found it difficult to get past the 20
exponential moving average. If you see ADX Indicator is
sloping on the downside, but that is fine. Negative DMI is still
above the positive DMI clearly reflecting the
bias of the market. One important point
I want to make is that always keep track
of individual candles that are printed
on a daily basis. Keep a record of these
candles in terms of bullish, bearish,
or neutral candles. This will always help you
know who is in control, that is, buyers or sellers. So this is the third
session where price is below the 20 exponential
moving average. Again, a supply
candle is visible. At higher levels
you can again see long wicks of a candle here. So as of today’s price
action no entry is available to short sell the stock. Price broke down below this
20 exponential moving average with a wide range,
bearish candle. And after that, out of the
three candles that are formed, two are bearish
and one is neutral. Again, no signs
of any strong buyers present in this system yet. So one more bearish candle forms with range extension
on the downside. Also we have formed a new low
for this particular down move. No signs of entry
yet on this day. Also all of these long wicks
that you’re seeing here, these now become strong
resistance region along with the 20
exponential moving average acting as resistance. So I hope you’re understanding
how to think this through. So in this particular
day what you see is you do get a strong candle. But you have to
remember one thing that this candle is strong,
there is no doubt about it, but this region that
is of long wicks will act as a resistance,
or you should anticipate that this would be
acting as a resistance, along with 20 exponential
moving average. So even as of today
nothing changes. Negative DMI is about
the positive DMI. ADX is clearly above 30. Price again, is below the 20
exponential moving average. No signs of entry as
no candle has touched the 20 exponential
moving average, yet. So this marks the sixth session where price has broken
down decisively below the 20 exponential
moving average. But still there is
no definitive sign of buying emerging yet. Apart from this
particular candle here, there is no strong candle
formation on the chart. Now sellers, as per what
we have seen till now are in total control. There’s no sign of
any entry as well. Remember one thing for
an entry condition, first we need high of a candle to touch to 20 exponential
moving average. And then the low of
this particular candle has to be breached
on the downside. So in this session we
almost have a candle that is touching the 20
exponential moving average, but still there is no
decisive entry point here. Now some bit of supply
is again visible at higher levels in terms
of these long wicks. But the important thing
that you have to see is that this is still
a borderline case. So this session
was again negative. Fresh low is seen
for this down move. Price for now is
drifting away from 20 exponential moving average. Again there is no sign of entry. If you look at the negative DMI, it is also moving
near the 30 mark. So this is the 30 mark here, this negative DMI is
hovering around the 30 level. Now this also suggests
that the trend is extremely strong
on the downside. Now you have to keep seeing
these subtle little signs suggest candle
strength, negative DMI or positive DMI structure,
along with the structure of ADX. Now LBR recommends that
ADX should be above 30, that represents strong signal, so naturally when negative
DMI, or positive DMI moves near 30, or above 30, that actually signifies
extremely strong trend on the downside or upside,
depending on which, that is negative
or positive DMI, is above or near the 30 mark. I hope this particular
point is clear as well. So in this session we’ve
had a strong candle where high of candle
has almost gone past 20 exponential average. Now again and this
is a borderline case, but LBR suggests
that one should wait for a well-defined entry, instead of chasing
such partial ones. So ADX is still above 30. Negative DMI is still
above positive DMI. And remember one thing, the
long wicks that you see here all of these will be
acting as resistance along with 20 exponential
moving average. So this session I will again
consider as a bullish session, though the candle
is not that strong. And some sort of selling has
emerged at higher levels. Now despite of some
sideways session and the two bullish
candles that you see here, there is no meaningful
pickup happening in the positive DMI. So this session is
still relatively fine because price has
managed to stay near the highs of this candle, which was the previous
session for a whole day. Although in terms
of strategy, again, there is no sign of entry as candle did not touch the
20 exponential moving average. So in this session we finally
have a candle that moved above the the 20
exponential moving average, and then closed below it. Now long wick again suggests
supply at higher levels. So based on what are the
rules we have discussed we now have a perfect setup
as per this trading strategy. Now the low of this candle
needs to be breached and we will then have the
entry on the short side. So on this day one would
have entered the trade at 372 where the previous
day’s low was breached. So based on the rules
illustrated by LBR this is a perfect
setup for short entry for this particular
trading strategy. Now recent swing high now
becomes the stop-loss, I have marked it on the chart. In case you are an
aggressive trader you can also take this
swing high as stop-loss. So nothing significant
to report for this day. Price opened lower but
moved up during the day. Again selling emerged
at higher levels and formation of
long wicks is seen. Now violation of
setup only happens when the recent swing
high is breached. Now until then any form of
random noise has to be ignored. As a rule of thumb
always remember that as markets head lower counter trend reactions are
always swift and with momentum. This is the nature of down move and you will have
to embrace this. So in this session
we’ve got a weak candle. This session the candle
has actually engulfed the body of the
previous session. And again the highs
have not surpassed the high of the previous candle. Also note that this
particular candle forms a new low for this
particular down move. So again I hope you’re seeing
how at times we are using tails, or wicks, or
engulfing patterns to analyze price
structure better in order to determine
who is in control, whether the buyers or sellers. So for the down
move of you’ve seen in this candle price
has now come down from 372 to 348. Look at how consistently
negative DMI is trading near the 30 mark, while ADX remains
above the 30 mark. This clearly signifies
that strength of trend on the downside
is really strong. So very similar session to
what we had a day before. Narrow range candle is formed where the range of
the current candle is completely inside that
of a previous candle. This is also known as
an inside bar pattern and it still signifies
volatility contraction. Now this is another session
where range of this candle is within the range of the
candle I’m showing on the chart. So now we have two
back-to-back candles in a row that are very narrow
range in nature and forming a double
inside bar pattern. Now remember when volatility
contraction happens you will see that range
gets violated on either side and that typically
happens with momentum. So now in the session you see
a wide range candle forming which is very natural
once you see two or more back-to-back inside
day bar patterns. So volatility as
such was contracting, that is why range
was moving lower. And whenever you
see this happening you will have volatility
expanding on the upside and price will either
begin to move up or begin to move lower. So note how negative DMI is
continuing to trade higher and this is happening when ADX Indicator
is again starting to move up. Again, these are subtle signs that you always have
to watch out for. So this is not a
significant session except that price has
not shown willingness to move down further. This current candle is
more or less in line with the long tail
candles that we saw before we started taking
up this example. And such patterns typically
mark pause in the current move. Just keep this thing in mind, that whenever you see
a long wick forming or a long tail forming, always remember that these
patterns have to be confirmed and they cannot be viewed
on a standalone basis. So another session
where we get a long tail suggesting sort of a
pause in down move, or reluctance of
price to move down. But with respect to trade,
and overall trading strategy, you have to note that
nothing significant changes as price is moving down, it is below the 20
exponential moving average. ADX Indicator is still above 30. And negative DMI, while
being above the positive DMI is trading close to the 30 mark. Again, emphasis here is
to ignore the random noise that is generated
while being in trade, and focusing on the rules
that you have in front of you. So in this session
price has moved up. Candle is visibly strong. And it has come on
back of two candles which were clearly
depicting long tails. However as I mentioned earlier do not forget that while
trading short sale trades you have to be prepared
for candles that scare you and counter trend moves as
such are always fast and scary. In this session we
get a candle where price has crossed the 20
exponential moving average. And then we see
long wick forming which actually represents
selling at higher level. Also if you look first-time, it is that positive DMI
has moved towards upside. But in terms of overall strategy always remember that these moves within the trade
are random noises and you have to ignore these. Now there’re two key things
that you have to remember here. Number one, long wick, that is representing
selling pressure ahead. Number two, trend is
down as suggested by this particular
trading strategy. Price is below the 20
exponential moving average. ADX Indicator is clearly above 30. And negative DMI is
clearly above positive DMI. In this session you
again get a candle that has moved above the 20
day exponential moving average and then it has faced
supply at higher levels. Again the concept of
long wick’s at play here. So for this strategy long
wicks and long tails, again I will repeat, give subtle clues about
shift in demand and supply. So for someone who
has not taken a trade at this particular level, a second entry is now available. And you have to wait for
breach of low of these candles that have crossed the 20 day
exponential moving average. So in this session we
again get a supply candle with a long wick clear
indications that on higher levels selling is
appearing on a consistent basis. So this is turning out to be
very similar to what we saw between October
first, if you see, and October 15th, where lot of
long wicks were being formed, suggestive of the
fact that there is selling pressure
at higher levels. Again there is no fresh
entry signs though. Low of all these candles
need to be breached. In this session we
have seen the lows of previous two or three
candles have been breached and hence someone who could
not have taken trade earlier can take it now. So entire process, if
you see, is very simple, and it only takes some practice to execute this
strategy perfectly. So what I will recommend
is that you can practice this strategy
on historical charts. And the best part is
that you don’t require any advanced technical
software for this. So I hope by now you can see
how on a day-to-day basis you have to look for
signs of demand and supply with candles within the context
of this trading strategy. You will have to keep a tab
on candles, ADX Indicator , and DMI. You can also use
candles volume charts so that you get an idea
about candle strength. But this particular
subject on candle volume and this strategy I have taken up towards
the end of this video. So remember one
thing, that this is a very simple trading strategy, and do not add more
variables to complicate it. Focus on keeping things simple and attempt to master
this simplicity of this particular
trading setup. So this is the entire
chart of JSW futures. We had only seen till of
this particular point. And after the first
and second entry price actually
steadily moved below. So in this entire
chart you can spot at least four entry points. That is at this
particular place, this one, this, and this
particular entry point. However the important
question here is which entry point is
the strongest and why? And which entry points you
should target for a trade. See the thing is, if you wanna
become a successful trader start thinking in
terms of probability and not certainity. What I mean by this is that
odds of trade being a success at first point is high. At second point odds reduce
as price has already fallen. At third point if you
see odds reduce further because price has now been
in a consistent downtrend, and at any point a substantial
counter trend rally can develop. At point four if you
see odds greatly reduced for the reasons I have
just stated earlier. So therefore, the
probability of trade reduces with each
entry you take. This applies more
for short selling as price falls
for a limited time when compared to the time
that price can trend higher. So as a rule of thumb, the reason why I have shown
you this particular chart, that as a rule of
thumb always target the first two trading
signals that you get while you are short selling. After the second
signal is complete or the second trade is complete, reduce your position
size by 50% at least for the third and
subsequent signals. Again, this is only
until when you don’t see a major retracement playing out. But underlying
message is very clear, do not chase every
signal on the downside. So let me now come to a
section of improvements and some key points for
this trading strategy. So one of the
improvements I thought of was using relative strength to filter strong
and weak stocks. So if you get a buy signal and relative strength
of that stock is strong, then that would become
a high probability trade and vice versa. Now I have made a three part
series on relative strength. Those of you don’t know about
comparative relative strength should check out these video. This is completely different
from the RSI indicator. Link to all the
girls will show up at the top end of your screen. Let me just show you this
point that I have mentioned on a chart. So this is the
relative strength chart when compared to NIFTY. This is the standard price
chart of JSW futures. And this is the
relative strength line of JSW against NIFTY. So as price has moved lower, relative strength versus
NIFTY is also moving lower. So clearly this is
indicating under performance with respect to NIFTY, making it an ideal
candidate to short sell. So if you’re interested
in short selling you need to look at weak
relative strength stocks where RS line is
clearly moving lower. And if you’re
looking for buying, based on this particular
trading strategy, you should look at strong
relative strength stocks where RS line would be
clearly moving higher. So this way you stick
with weak stocks when you want to short sell, and you stick with strong
stocks when you want to buy. Also one more
recommendation that I have is that you should be
viewing price action with candle volume charts. So this would actually
help you visualize demand and supply
candles better. Let me again just
show you on chart. So this is the candle volume
chart for again, JSW futures that we just saw as an example. So look at how strong
volumes are on the downside. Now this is something
that is not visible on a standard candlestick chart. So when you combine this
strategy with candle volume you will again increase
odds of success. So case in point for
this chart if you see major volume across
candles is present whenever price is
attempting to move down. And look at the candles
where, candle volume, that is where price is
attempting to move up, there is hardly any volume
in that particular move. So what I’ll recommend
here is that first practice this concept
on long only trades. On equities. Futures should be
avoided in the beginning. Timeframe again
is very important. Preferred daily time frame only. For improving odds of system be mindful of
broader market trend. So if broader market trend
is up prefer long trades. If the trend is down
prefer short trades. Golden rule of trading
is to align with trend and then trust it fully. The key here for this
particular trading strategy is to practice this
on historical charts and then to take notes. You need to practice long
trades on at least 10 stocks with a time span of
five years of data. Do not skip this process. You will learn so much
in this practice phase that you will be able to
handle all the situations that come up in
real-time trading. Now too many traders
actually commit the mistake of learning something and then
trying to earn money off it on the following day. This just does
not work this way. Trading is a long-term game, and you need serious practice
to survive in this business. Now whether it is position size, stop-loss, exit,
or stock selection, you have to focus on
all these elements while practicing on
historical charts. So let me know in the
comments section below if you have any doubt
about what I’ve shown you. And if you have some suggestions
to improve this further do let me know in the
comments section below. So all credit to Linda Bradford
for this highly effective yet simple trading strategy. So thanks a lot for
watching this video guys. In case you have liked
what I have shown you do share this video and hit
the like button as well. So let me know in
the comments section if you have any doubts,
take care and be safe. (upbeat music) – [Announcer] Click on
the subscribe button and bell icon to get
instantly notified when a new video is uploaded. Thank you for subscribing. (upbeat music)

100 Replies to “Swing Trading Strategies – ADX Indicator Trading Strategy & Moving Average Strategy”

  1. Thanks for the video. Hope exit target could be at 15% or recent swing high or low.
    Also please share some good intraday strategy.

  2. Sir, on investing.com the indicator directional movement is the same as ADX OR different. Can we use this strategy in option trading

  3. Good morning brother, had a doubt in plotting market profile session chart in trading view
    Under rows layout we can select number of rows(which comes as default)
    Row size 24 as default
    Which is preferable as another option is
    Rows layout-ticks per row
    Row size- n number(as per your experience).
    Thanks

  4. Thnx a lot for the video… what if a stock retraces back to 20EMA and close above it and next day if it goes back below previous days low which is below 20EMA? Is close below/above 20EMA important ?

  5. Very simple yet powerful swing trading strategy sir
    No requirement of costly setup and trading software
    Thanks to you sir and thanks to LBR also 👌👌👍👍

  6. Thank you for sharing this wonderful strategy. I have some query . Do you plot ma with rs? If yes then how meny periods ? And is it compulsory to consider beta value? I'm trying to build an afl to find such stock. Please reply.

  7. Sir, in swing trading strategy u were using 200 DMA , stochastic indicator and also beta of the stock in trading view.com . I didn't get the beta indicator in trading view . Pls help

  8. Great video, mind blowing, Thanks a lot for your effort and time. As a beginner these type of strategies are easier to learn and practise. This will help us to withstand in market before learning the complex strategies and trading psychology.

    I thanks a lot from my bottom of heart on behalf of all beginners.

  9. Thank you, sir.
    You make it simple for us to understand.
    Won't hesitate to thank you.
    Practice is the key to survive in this business.
    Lastly, Sir, I want to help you back with anything I can.
    It would be an honor to meet you someday or at least know more about you.
    Cheers to life.
    From loss to profit my journey has been wonderful mainly because of you and other mentors.
    Let me know if I can help you.
    Thanks for everything.
    Anyone reading this must consider subscribing.

  10. अपने एडीएक्स के ऊपर काफी अच्छा स्विंग ट्रेडिंग के विषय में बताया कृपया आप वीडियो हिंदी में बनाएं तो बहुत ही अच्छा रहेगा समझने में आसानी रहेगी और लाइक भी ज्यादा मिलेंगे

  11. Dear sir…Nice secession and this is noiseless strategy… Whenever I come across ADX it was always difficult to understand and use. But afterwards this 30min secession video ; the way you explained it's Amazing now. Thanks alot for this wonderful secession. 🙂

  12. Nice video on this strategy ..thanks, just want to know, if you have done any tweaking to it as ADX is slow indicator so 30 threshold is bit high by that time the trend progress to more than 20% (just my observation). if we can reduce this threshold then probably we can get early entry. please advice.

  13. This the very Best one Strategy I ve seen for going long or short, and thank you for giving some time and knowledge.
    I just want to know that can we apply same adx and 20Ema for intrady setup, or else is there any best intrady setup please provide.

  14. Your video's are great. Please keep posting. This strategy is also very effective, will try in the coming days. BTW thanks for keeping it in english.

  15. Very much informative and clear explanation…and above all giving credit to primary author is height of simplicity and selfless work….may God always give you inner strength and wisdom…
    Where to find candle volume and beta in trading view…I M finding difficult sir..

  16. you've been a great help my friend, liked and subscribed!!!!
    but one more question – when entering at the pullback to MA, how to tackle the problem of a possible double top (from previous swing high?)
    should i take profits when approaching previous swing high or just stay in? im really troubled by this

  17. Sir does it apply on index as well if yes then today i see IT index is showing down side as per this rule can you explain

  18. THANKS SO MUCH SIR…..APPRECIATE YOUR EFFORTS.
    KEEP MAKING SUCH WONDER FULL VIDEOS .
    Understood how to trade ADX….again Thanks alot

  19. Excllnt and simplistic in explanation. Sir what is the tgt and better to trail SL if so then plz suggest best way to trail for this set up. Thanks

  20. Grt video as alwayz..while historical anlysis is it necesary to analyse in 1 step ahead time frame than d actual 1 we keep while tradind..like if we trade on daily tim fram then should we keep our historical analysis time frame to be weekly?suggest plz

  21. While back testing i found that sometimes adx felt below 30 level but price was above 20 Ema..What should we do in such condition , exit the position or wait for sl to hit

  22. Great strategy and great (simple way )explained.only on this strategy can we trade in future and options? Or rsi and stochastic indicators require for more probability ?

  23. Very nicely explained…will work on it….Can you elaborate or anything which can give stocks selection ..in chartink

  24. Hello Sir,
    Again good information. Understood in detail the entry points, when should we exit? Please clarify.

  25. Link to All Swing Trading Videos Is given here. https://www.youtube.com/playlist?list=PL9myHLrE5hrPQI6ljQCNZ0KQsnvTsgENG

    Subscribe To Our Channel https://www.youtube.com/c/TradeWithTrend?sub_confirmation=1

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    Check Out all other videos at https://youtube.com/tradewithtrend/videos

    Kindly hit the Subscribe Button & Bell Notification Icon.

    Thanks For Watching Guys. Tc & Be Safe.

  26. Thank you sir. I find most YT content on trading very banal and repetitive with people stealing content and reposting the same strategy/education in their name. Your content is very detailed and great education for budding traders. Do you have a signal and discussion group ?, would be interested to join.

  27. Waiting for ADX crossover 25 it's being late to trade with trend. I like using aggressive one when ADX below 20 but it's start angling up to get early in trend as possible.

  28. how to scan stocks for ADX above 30 and MA as mentioned? scan both for cash and future,Great work thanks

  29. Hello Sir , You have mentioned in many videos High Beta query in comment section , But I am not able to find it ,Can you please help me to find it

  30. Hi ST..Is it important that the decision candle wick touches the 20EMA. Just scanned some stocks that meet the criteria for ADX and some of them have crossed the 20EMA and closed below it. Do we consider such stocks or only the wick needs to touch the 20EMA…Thanks

  31. Hi Sir,
    This LBR strategy is working well along with the additional filters suggested by you for the past two months. Now a days, private and public banks are giving signals under this strategy, my query is that we are looking for those strong stocks whose RoE and RoCE are greater than 20 or atleast 15% for swing trades, but most banks' RoE,RoCE are less than 10, sometimes less than 5, should we ignore looking at RoE and RoCE in case of banks to consider trades under this strategy?
    Thanking you in anticipation!

  32. Hey thanks for the great explanation! But I have a fundamental question – how do we get alerts on stocks trading 'around' a particular level – e.g., 20 EMA? What sort of software application/service would you recommend for this? This is a key question for many beginner traders.

  33. I find all the examples you use and how you have written everything out so beneficial in helping us learn. I don't see that much effort in other educational videos. Thank you ❤

  34. Whenever we talk about beta value of a particular scrip what is the period of calculation of it. Have checked the tradingview script for the same. Would like to know if the beta considered is of that specific day or else

  35. nice sir you are so great & genius you are my teacher profecer in stock market thanks for sharing a valuable knowledge sir thx so much
    but i am a knowledge about English is very low so sir some word is not understanding but with pracical i am understand this thing 🙏🙏🙏🙏

  36. FROM THIS STRATEGY
    1)I learnt stock selection for swing trading [Using technical indicator]
    2)I learnt where to take entry into the trade [Using technical indicator]
    3)I learnt where to place stop loss [Using technical indicator]
    But I could not learn one important thing
    1)Where to book profit and exit from trade
    If you please explain where to book profit and exit from trade Based on some technical indicator or price-action,It will be helpful for us

  37. As i am beginner and learned many things from this video series.
    Thanks a lot for helping beginners.
    Please help me in plotting ADX Indicator in Trading view dot com as i am not getting same as you plotted.

  38. Sir can you please confirm the setup of pidilite …is it valid to go short below today's low…as per adx strategy?…sharing with you the picture…

  39. you r too good man, seriously i mean, point to point narration, no nonsence chipplers, calm voice, goood presentation, very logical, very professional without charging a penny, god bless u, u truly knw the value of sharing is caring

  40. Sir thanks for the video, please where is the beta code for trading view dot com that you mentioned in the video at time 15:24. Thanks

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