Average Directional Index (ADX)
The ADX is a momentum indicator that is used to see which way the price trend is going and how strong the trend is. This indicator consists of 3 different lines: the ADX, DI+ and DI-, all 3 the lines have a value between 0 and 100. The ADX line displays the strenght of the trend, a value above 25 is considered a trend and the higher the value the stronger the trend. Any value below 20 indicates no trend, the market is moving sideways. The DI+ and DI- lines are to indicate the direction of the trend, either up or down. If the DI+ line has a value that is higher than the DI- then there is a upwards trend. When the value of DI- is higher than DI+ then there is a downtrend. The higher these values get, the stronger the trend is.
So basically this indicator is used to determine the trend of the price very quickly, this can be very usefull in Gunbot. Using ADX will help you make safer trades of a higher quality, the result may also be that you will get less trades in total.
Warning: This strategy has no
GAINprotection. Be aware that this can lead to sell orders below your break-even point.