Scalping ideas (ADX and Bollinger bands)
Submitted by Edward Revy on April 22, 2007 - 10:24.
Scalping with the help of ADX:
To scalp effectively with minimum time spent, Forex scalpers need to know when the market is trending well and when there is nothing to wait for.
To find out about the strength of the market trend use ADX (Average Directional Index) indicator.
ADX does not show the direction of a current trend, it only shows the strength of the trend. Reading below 20 indicates a weak trend, reading just above 20 – gaining new strength trend and reading above 40 – very strong trend.
It is that simple – scalping is weak when the market is weak, when ADX deeps below 20 – opt for other life activities, do not sit and waste your time in Forex.
Scalping with the help of Bollinger bands:
Bollinger bands can help determine trends and especially upcoming trend reversals.
When price moves outside the Bollinger bands it is suggests a continuation of the current trend, while bottoms and tops made outside the Bollinger bands change to bottoms and tops made later inside the Bollinger bands suggest upcoming trend reversal.