ADX Color Change by Behemoth

I find this tool to be the most valuable and accurate entry point indicator along with moving averages and the VWAP.

ADX Color Indicator - Controls & Intraday Trading Benefits

Indicator Controls:

1. ADX Length (default: 14)
- Controls the calculation period for ADX
- Lower values (7-10) = more sensitive, faster signals (better for scalping)
- Higher values (14-20) = smoother, fewer false signals (better for swing trades)
- *Intraday tip:* Try 10-14 for most intraday timeframes

2. Show Threshold Levels (default: On)
- Displays the 20 and 25 horizontal lines
- Helps you quickly identify when ADX crosses key strength levels

3. Use Custom Timeframe (default: Off)
- Allows viewing higher timeframe ADX on lower timeframe charts
- *Example:* Trade on 5-min chart but see 15-min or 1-hour ADX

4. Custom Timeframe
- Select any timeframe: 1m, 5m, 15m, 30m, 1H, 4H, D, etc.
- *Intraday tip:* Use 15m or 1H ADX on 5m charts for better trend context

5. Show +DI and -DI (default: Off)
- Shows directional movement indicators
- Green line (+DI) > Red line (-DI) = bullish trend
- Red line (-DI) > Green line (+DI) = bearish trend

6. Show Background Zones (default: Off)
- Visual background colors for quick trend strength identification
- Green = strong trend (ADX > 25)
- Yellow = moderate trend (ADX 20-25)

Intraday Trading Benefits:

1. Avoid Choppy Markets
- When ADX < 20 (no background color), market is ranging
- Reduces false breakout trades and whipsaws
- Save time and capital by stepping aside during low-quality setups

2. Identify High-Probability Trend Trades
- **Green line + Green zone** = strong trend building, look for pullback entries
- Yellow line crossing above 20 = early trend formation signal
- Catch trends early when ADX starts rising from below 20

3. Multi-Timeframe Analysis
- Use custom timeframe to align with higher timeframe trends
- *Example:* If 1H ADX shows green (strong trend), take breakout trades on 5m chart in same direction
- Increases win rate by trading with the bigger picture

4. Exit Signals
- When ADX turns red (falling), trend is weakening
- Consider tightening stops or taking profits
- Avoid entering new positions when ADX is declining

5. Quick Visual Confirmation
- Color coding eliminates need to analyze numbers
- Instant recognition: Green = go, Yellow = caution, Red = trend dying
- Faster decision-making during fast market moves

6. Scalping Strategy
- Set ADX length to 7-10 for sensitive signals
- Only scalp when ADX is rising (blue, yellow, or green)
- Exit when ADX turns red

7. Breakout Confirmation
- Wait for ADX to rise above 20 after a breakout
- Filters false breakouts in ranging markets
- Yellow or green color confirms momentum behind the move

Optimal Intraday Settings:

- Day Trading (5-15 min charts):** ADX Length = 10-14
- Scalping (1-5 min charts):** ADX Length = 7-10, watch custom 15m timeframe
- Swing Intraday (30min-1H charts):** ADX Length = 14-20

Simple Trading Rules:
✅ Trade: ADX rising + above 20 (yellow or green)
⚠️ Caution: ADX flat or just crossed 20
❌ Avoid:*ADX falling (red) or below 20

The key advantage is staying out of low-quality, choppy price action which is where most intraday traders lose money!