| Updated: September 12, 2025Combining the moving average convergence divergence and the average directional index
You will learn about the following concepts
- Indicators used with this strategy
- Signals to look for
- Entry point
- Stop-loss
- Profit target
For this strategy, we will examine the daily chart of GBP/USD. The indicators we will use are the MACD (settings: short-term 3, long-term 10, MACD SMA 18) and the ADX with a period of 18, together with +DI (green line on the chart below) and -DI (red line on the chart below).
A trader needs to examine the MACD. If the MACD turns positive while the +DI moves above the -DI, this sets up a long entry. If, however, the +DI is below the -DI and the MACD issues a long signal, the trader should abstain from action. He/she will instead wait for the +DI to move back above the -DI before entering a long position.
If the MACD turns negative while the -DI moves above the +DI, this sets up a short entry. If, however, the -DI is below the +DI and the MACD issues a short signal, the trader should abstain from action. He/she will instead wait for the -DI to move back above the +DI before entering a short position.
- Trade Forex
- Trade Crypto
- Trade Stocks
- Regulation: NFA
- Leverage: Day Margin
- Min Deposit: $100
The trader should use a trailing stop to preserve gains.
Below, we present an example of a long trade, a short trade and a situation in which the trader should not enter the market.
