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Indicators

Trend indicators: MACD, EMA, ADX and DI

They answer two questions: is there a trend, and which way does it point.

MACD

The difference between two moving averages (12 and 26) and its smoothed line (9). Two events count: the cross of the MACD line with the signal line, and the sign of the histogram — the distance between them. A cross upward in a rising trend is an entry with the trend.

MACD lags by construction: it averages the past. In a range that produces false crosses, so it is not counted in the range regime.

The EMA fan

Three moving averages: 9, 21 and 50. When they line up in order (9 above 21 above 50) the trend is considered healthy. A mixed order is a sign of uncertainty.

Pullback to EMA21 and resumption

One of the most reliable factors in the set. In a trend price retreats to EMA21 and a candle appears that resumes the move with the trend. This is an entry on the pullback, not at the peak.

ADX and DI

ADX measures the strength of a move, not its direction. The core uses a threshold of 25: below it there is effectively no trend, and trend factors are not counted. Direction comes from DI: +DI above −DI means an upward move.

The pair "ADX above 25 and DI aligned" belongs to the set of key trend factors.

Donchian channel and structure

The Donchian channel is the high and low over 40 candles. A breakout with the trend is a continuation factor; touching the edge in a range is a reversal one. Market structure tracks the sequence of highs and lows: a rising structure is a chain of higher peaks and higher troughs.

Updated: 2026-09-10