Looking to refine my trend continuation strategy. For those of you successfully trading trends in Forex, what's your preferred indicator or combination of indicators for confirming that a trend is likely to continue rather than reverse? Moving averages, MACD, ADX? Specific settings would be helpful.
I primarily use simple moving averages for trend confirmation, usually the 50 and 200 period. When price stays consistently above the 50 SMA, and the 50 is above the 200, that's a strong continuation signal for me.
ADX is my go-to. I look for the ADX line to be above 25, and ideally trending upwards, which indicates strong trend momentum. The DI+ and DI- crossing over also provide good directional confirmation.
Honestly, for trend continuation, I pay less attention to indicators and more to price action itself. Higher highs and higher lows (or vice-versa) on multiple timeframes, with good consolidation patterns, often tell me more than any single indicator ever could.
While MACD can be good for momentum, for actual continuation, I'd say volume is a seriously underrated indicator in forex, even if it's not direct. Consistent volume supporting the trend direction, especially on breakouts, can be a huge tell.