ADX Meter Overlay

The ADX Meter Overlay is a trend strength visualization tool that colors candles based on the ADX (Average Directional Index). This indicator helps traders easily identify when the market is trending strongly versus when it is weak or ranging.

🔹 How It Works:
✔️ ADX Measures Trend Strength: The ADX does not indicate trend direction—only trend intensity.
✔️ Candle Colors Change Based on ADX:

Green candles = Strong Uptrend (ADX above threshold, bullish momentum).
Red candles = Strong Downtrend (ADX above threshold, bearish momentum).
Blue candles = Weak Uptrend / Choppy Market (ADX below threshold).
Orange candles = Weak Downtrend / Choppy Market (ADX below threshold).
✔️ Alerts when ADX Crosses Above/Below Threshold: Notifies traders when trend conditions change.
📊 Trading Strategy Based on ADX Meter
📌 Best Timeframes:

Scalping: 1M, 5M
Day Trading: 15M, 1H
Swing Trading: 4H, 1D
📌 Best Markets:

Forex, Crypto, Stocks, Commodities
✅ Entry Rules (Buying/Long Trade)
🔹 Look for Green Candles:

ADX above threshold (Strong Trend).
Price making higher highs & higher lows.
Combine with a 50 EMA or 200 EMA for confirmation.
❌ Exit Rules (Closing a Long Trade)
🔹 If ADX drops below threshold (candle turns blue/orange) → Exit or reduce position.
🔹 If price crosses below 50 EMA → Trend is reversing, consider exiting.

📉 Entry Rules (Selling/Short Trade)
🔹 Look for Red Candles:

ADX above threshold (Strong Trend).
Price making lower highs & lower lows.
Combine with a Moving Average or RSI for extra confirmation.
❌ Exit Rules (Closing a Short Trade)
🔹 If ADX drops below threshold (candle turns blue/orange) → Exit or reduce position.
🔹 If price crosses above 50 EMA → Trend reversal likely, exit short.

📌 Why Use the ADX Meter?
✔️ Quickly spot strong trends vs weak/ranging markets.
✔️ Avoid false breakouts & low-momentum trades.
✔️ Works with any trading strategy – Combine with RSI, MACD, or Moving Averages.

🔥 Next Steps:
📌 Add the ADX Meter Overlay to your chart and test it on different assets & timeframes.