The ADX Break and Ascending Triangles Your Key to Being Somebody, Instead of Being Just a Bum

What is the ADX line? An ADX line measures the strength (not the direction) of a trend. An ADX above 40 shows a strong trend. But the higher it gets above 40, the more likely it will reverse. ADX’s above 60 are more rare, but are beautiful things! Look for ADX breaks above 40.

What is an ADX Break? An ADX break is a pattern identified by: A falling (or rising) stock price. Increasing sell (or buy) volume. An ADX that peaks and “breaks,” preferably above 40. Capitulation signs. Reversing of the stock price. Reversing volume (sell to buy, or buy to sell).

Finding ADX Breaks to Trade Use Rapidly Rising or Falling workspace on trade station. Use Jesus scanner. CNBC bad news. The Chad Scanner Add the ADX to your radar, and sort.

Ways to Determine Best Entry At ADX Break above 40. At first break of a previous two-minute candle’s high, with stop at previous 2’s low (or the 1, or 5) After capitulation candle and volume. When selling volume turns to buying volume.

Reversal Candles

Capilulation Signs In an ADX break pattern, one will often see increasing red blow-off candles, as the last of the sellers get out of a stock. The last candle at the bottom may be a change-up, doji, hammer, double bar, bullish engulfing, long red candle with a long buying tail.

Capitulation Candles

WAYS to Play the ADX BREAK When up a decent amount, place tighter stop on half and place stop at break even on the rest. Or when up a decent amount, tighten stop on half and leave stop at original place to leave more wiggle room. Let the rest ride and watch for price and market cooperation. Sell or tighten stops “into shape.”

It’s More than Just a High ADX Watch for fake-outs. Look for increasing sell volume, then buy volume, and a defined ADX break. This set-up (left) does not show capit- ulation, or a distinct ADX break, or volume change.

Scaling Out

The Perfect “Stair-step” shape

The Safest ADX Breaks The safest ADX breaks occur when the market is sideways or going up, and the price falls to a 50 or 200 moving average on the daily chart. If the market is also failing hard, and does not rebound, the ADX break may be short lived or fail.

The Best ADX BreaK Trades

Falls to the Daily MA

Falls to the Daily MA

Reverse ADX breaks

ADX Break Example 1

ADX BReak example 2

ADX break Example 3

ADX break Example 4

Ascending Triangles

What is an Ascending triangle? Flat resistance at top. Higher lows. Breakout with volume above resistance.

AAPL Ascending TRIANGLE

AAPL Ascending with Volume

SCTY with Volume

Another Ascending on AAPL

Find the Ascending Triangle

There it is

Where is the Ascending Triangle?

Find the ascending Triangle

AAPL Ascending on Daily

Biggest Mistake: Getting in too Early “the Money is in the Middle…”