In the first
installment of this series, we looked at using RS to find the hottest stocks and
sectors. In this second installment, we will look at using ADX to find
potential candidates and sectors to short.
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Profitable trading is, in essence, based on price relationships that put you in high-probability situations. In this Trading Lesson, I show you why I selected Nokia as a pattern setup in my March 2 commentary.
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The Average Directional Movement Index (ADX) measures the trend strength of a market but not its direction. The higher the ADX reading, the stronger the trend, regardless if it is up or down.
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