Relative strength index (RSI) & Average directional movement index (Adx) trading system

Relative strength index (RSI) & Average directional movement index (Adx) trading system





In this blog, we will discuss the relative strength index (RSI) & the Average directional movement index (Adx) indicator and how to use these indicators together and earn profits from the stock market.

 Rules for trading Relative strength index (RSI)

Momentum based on RSI for short trades is as follows-

  1. RSI— 40-45~mild short (25%),
  2. RSI— 35-40~moderate short (50%)
  3. RSI— 30-35~strong short (75%)
  4. RSI below 30~very strong short (100%).

    Momentum based on RSI is as follows-for long trades

    1. RSI— 55-60~mild long(25%),
    2. RSI— 60-65~moderate long(50%)
    3. RSI— 65-70~strong long (75%)
    4. RSI Above 70~ very strong long (100%)

    Adx indicator for intraday trading


    Most of the trader ask how to use ADX indicator for intraday trading. ADX indicator measures the strength of the trend. It confirms whether we are in a trending market or sideways market.


    Standard Rules of Adx indicator for intraday trading

    • If +DMI is above -DMI and ADX value is between 0-30 stock trend is UP  and But Strength is weak don't Take any trade.
    • If -DMI is above +DMI and ADX value is between 0-30 stock trend is Down and But Strength is weak don't Take any trade.
    • If +DMI is above -DMI and ADX value is between 30-50 stock trend is UP  and Strength is Strong take half of your position.
    • If -DMI is above +DMI and ADX value is between 30-50 stock trend  Down  and Strength is Strong take half of your position
    • If +DMI is above -DMI and ADX value is between 50-80 stock trend is UP  and Strength is VeryStrong take half of your position.
    • If -DMI is above +DMI and ADX value is between 30-50 stock trend  Down  and Strength is Very Strongtake full position
    • If +DMI is above -DMI and ADX value is between 80-100 stock trend is UP  and Strength is a very strong exit from your position
    • If -DMI is above +DMI and ADX value is between 80-100 stock trend Down and Strength is Very exit from your position.


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