ADX With MACD II Trading System For MT4

ADX With MACD II Trading System For MT4

Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.


The ADX With MACD II Trading System For MT4 focuses on the market momentum. The indicators used in this system analyze the shift in market momentum and provides important information regarding the endpoint of retracement. So, this system can be used in any currency pairs. But to make things easier in the learning stage, we will trade only the major currency pairs.

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Are ADX and MACD Important in Forex Trading?

The forex market is the world’s biggest financial market that runs through an automated system. There is no central exchange or authority in the forex market. This market is free from external manipulation and the retail traders may predict the direction of the trend by analyzing the technical and fundamental data.

Usually, retail traders execute their trade after analyzing the market data by using a specific strategy. In this method, we will use the price momentum and find the potential trade signals near the critical support and resistance.

ADX works as a trend identifier and it represents the market state with the Negative Directional Indicator (-DI) and the Positive Directional Indicator (+DI). ADX helps traders to identify the strength of a trend. The crossover of the -DI or +DI provides a potential trading opportunity.

On the other hand, MACD helps identify the overbought or oversold zone in any asset. The readings are represented by a Histogram. If the Histogram bars are above the zero lines, the trend is bullish. On the contrary formation of the bars below the reference, suggests the dominance of bears.


The ADX With MACD II Trading System For MT4

In this trading strategy, we will monitor the ADX indicator and look for  -DI and +DI crossover. To get the confirmation, we will analyze the reading from the histogram bars.

Let’s have a look at the main chart after installing the necessary indicators:

  • Moving Average Convergence and Divergence (MACD) (3,10,18)
  • Average Directional Index (ADX) +DI lines and -DI lines.


To determine the direction of the trend and identify the entry point, we will be using the following indicators:

  • Fast EMA 3
  • Slow EMA 26
  • Signal SMA 18

The EMA lines should have a positive slope during the bullish trend. On the other hand, the slope will be negative during the downtrend.


ADX With MACD II Trading System For MT4 - Bullish Trade Setup

The ADX With MACD II Trading System For MT4 can be used to trade any currency pairs. But, we will stick to the simple approach and look for the trade signals in the major currency pairs only.

Bullish Trade Condition

  1. ADX +DI should be above the -DI.
  2. MACD Histogram should have Bullish bars and it will be placed above the zero lines.
  3. If the ADX +DI is below the -DI, ignore the trade even if the MACD Histogram provides a bullish signal.


Execute the long trade after the conditions are filled. But keep the risk exposure low in each trade.


Stop Loss

The stop loss can be set by analyzing the support level. You can also use the EMA lines as a reference stop loss point. If possible, evaluate the candlestick pattern to find more precise stops.


Take Profit

The take profit level is usually set to the nearest resistance level. But the take profit should be set in a standard way so that the minimum risk to reward ratio is not less than 1:2.


ADX With MACD II Trading System For MT4 - Bearish Trade Setup

For the bearish trade signal, we have to check 3 conditions.

Bearish Trade Condition


  1. ADX +DI  should be below the -DI.
  2. MACD Histogram bars should be below the zero lines.
  3. If the ADX -DI is below the +D, I ignore the trade even if the MACD Histogram provides a bearish signal.


Execute the short trade, after checking all the required conditions. Try to avoid taking the trades at the running candle.


Stop Loss

The stop loss point can be identified by using the EMA levels. You can use the swing high to find the critical resistance level which may work as a stop-loss point for the trades. According to the inventor of this trading strategy, the stop loss points should not exceed 30 pips. So, if you have a trade signal having a stop loss over 30 pips, ignore the trade setup. 


Take Profit

Find the key swing low to determine the nearest support. The nearest support zone will act as your take-profit zone. But maintain a 1:2 or better risk to reward ratio while setting up the TP.


ADX With MACD II Trading System For MT4 - Conclusion

By now, you can realize the system mostly depends on the EMA patterns, MACD, and ADX reading. But with the help of the price action signal, the retail traders may increase their confidence level while using this system. Before you integrate the price action pattern into this system, learn the function of this strategy in the paper trading account. Make yourself comfortable so that you don't have to deal with any sort of confusion while trading the real market.

Note that, you should be always embracing the losing trades no matter which trading method you follow. Being a new user of this trading strategy, you should have the mental courage to accept few losing trades in the long run. As long as you maintain proper money management rules, you should not have much trouble in dealing with the losses. Make yourself comfortable with this system by practicing this strategy in a demo account. And learn what it feels like to have some losing trades even after doing all the analysis properly.



Download the complete system description and the files here:

FREE ADX With MACD II Trading System

Download the FREE ADX With MACD II Trading System for MT4.

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