The ADX VMA Trend indicator is a trading algorithm, the calculations of which are based on the functioning of two forex indicators, namely the standard ADX indicator using smoothing in the form of a modified version of the VMA moving average. Trading with the indicator is carried out during a certain trend period, so its calculations are aimed at determining the strength and direction of the current trend and opening trades in this period, respectively. It is presented in the lower window of the price chart as a colored histogram, taking into account the values of which the current market movement is determined and the market is entered.
The ADX VMA Trend indicator is suitable for trading on any timeframe using any currency pairs. Keep in mind that the indicator is also suitable for use in multi-timeframe mode.
The settings of the ADX VMA Trend indicator consist of several sections responsible for its general functioning. To change the parameters of its technical work, the Input Parameters section is used, to change the general visualization, the Colors section, and the Levels section is used to add signal levels to the indicator window.
-Time frame - parameter for using the trading timeframe. The default value is current.
-AdxVma period - indicator calculation period. The default value is 10.0.
-Price - type of the price to which the indicator's calculations are applied. By default, it has the Close value.
-Smoothing method - the type of smoothing applied to the indicator calculations. The default value is AdxVma.
-Smoothing period (<=1 for no smoothing) - indicator calculation smoothing period. The default value is 5.
-Turn alerts on? - parameter to have a notification when a signal is received. The default value is false.
-Alert on current bar? - signal parameter on the current bar. By default, it is set to true.
-Display messages on alerts? - parameter for receiving a message in the main chart window when a signal is received. The default value is true.
-Play sound on alerts? - the sound notification parameter when receiving a signal. The default value is false.
-Send email on alerts? - the option to receive the signal as an e-mail. The default value is false.
-Send push notification on alerts? - parameter for receiving push notifications on a mobile device. The default value is false.
-Interpolate in multi time frame mode? - parameter for using the indicator in multi-timeframe mode. The default value is true.
The ADX VMA Trend indicator is a histogram indicator, and its method of application does not differ from other histogram indicators. To open a certain trade, the current trend is determined, namely its direction and strength. For this, in turn, the color, size and direction of its columns should be taken into account. If the current trend is strong upward, long positions are opened; if the trend is strong downward, short positions are opened. When the current trend changes or weakens, trades are closed.
Signal for Buy trades:
- At least three bars have a color with a growth value, with the new column of the histogram being higher than the previous one.
Upon receipt of such conditions, a buy trade can be opened on the signal candle due to the presence of an upward trend in the current market. The trade should be closed when the current trend weakens or changes, namely at the moment the histogram color changes. At this moment, it should be also considered opening new trades.
Signal for Sell trades:
- The histogram of the indicator has a color with a falling value. In this case, new columns are formed above the previous ones.
Upon receipt of such conditions characterizing the presence of a downward trend, a sell trade can be opened. If the current trend changes or weakens, namely, when the histogram color changes, one should consider closing the current trade or considering opening a new one.
ADX VMA Trend is a very accurate trading algorithm since its calculations are based on the interaction of very accurate indicators, the effectiveness of which has been proven over time. To increase the accuracy of signals, it is recommended to use the indicator as an addition to trading strategies, that is, with other indicators, filters or advisers.