Bottom and top fishing strategy with ADX indicator - Overview

  • Currency pair: any.
  • Timeframe: 5 minutes, 15 minutes, 30 minutes, 1H, 4H, and date chart. You note when trading with this strategy should trade each chart individually.
  • Indicator: 20-stage ema, 40-period ema, and 14-period ADX indicators apply to all of the above timeframes.

The idea of ​​this trading system is based on the application of the ADX indicator: measuring the strength of a trend while the ema 20 acts as a flexible support/resistance line. Here are some other uses of the ADX indicator:

  • Indicates whether the market is trending or not.
  • Indicates whether the entry time at a trend is too early or too late.
  • Trend-formation warning, reversal, or renewal (trend renewal).

Trapping bottom and top with ADX indicator - Trading rules

The first step in trading with a bottom and top fishing strategy with an ADX indicator is to find a chart with ADX above 30 indicating a strong trend in the market. You can start with daily charts and go to shorter charts. If you see some timeframes with ADX above 30, you should choose the longest chart.

Bottom and top fishing strategy with ADX indicator - Selling conditions
  • Define timeframe with an ADX indicator above 30.
  • If ema 20 crosses ema 40 and falls, the market is in a downtrend, so only looking for a chance to place a sell order.
  • As soon as the candle hits the ema 20 line, place a sell pending order 1-2 pips below the bottom of the candlestick, or you can sell at the market price.
  • Place stop loss 1-2 pips above ema 40.
  • Set your target profit 2 to 3 times your risk exposure.
Bottom and top fishing strategy with ADX indicator - Buying conditions
  • Define timeframe with an ADX indicator above 30.
  • If ema 20 crosses ema 40 and goes up, the market is on an uptrend, so only find opportunities to place buy orders.
  • As soon as the candle hits the ema 20 line, place a buy pending order 1-2 pips above the top of the candlestick, or you can buy at the market price.
  • Place stop loss 1-2 pips below ema 40.
  • Set your target profit 2 to 3 times your risk exposure.