The ADX Strategy for Choosing Strangles vs Directional Trades
Most traders open a chart and ask which way the stock is going. The better first question is whether it is going anywhere at all. A sideways stock and a trending stock call for completely different trades, and guessing wrong is expensive. Knowing which one you have is the first step to finding trading opportunities. In this video I show you the ADX strategy we use as a filter inside Option Samurai. The Average Directional Index is a technical indicator that measures trend strength, while its DI+ and DI- lines tell you which way the trend is leaning. You will see the filter on a short strangle scan with the Sideways preset, the Advanced View when you want your own thresholds, and the indicator under the price chart in Research. Then the full process on a real idea: a short strangle on Oracle, whose ADX has been below twenty for weeks, and the timing lesson that comes with it - you want to consider the trade right when ADX crosses below twenty, not after. Finally, our free ADX backtest on Oracle: after a quiet reading, Oracle's average move over the next ten trading days was about 0.5%, against close to 0.9% after any day. As always, what you see on the screener are candidates to investigate, not finished trades. In this video you'll learn: 1. What ADX tells you about trend strength, and what DI+ and DI- add 2. How to use the ADX filter in a scan, Basic and Advanced View 3. How to go from scan candidates to a real short strangle on Oracle 4. How to check any stock with the free ADX backtest ⸻ About Option Samurai Option Samurai helps you find better trades, faster. Our scanner and tools are built for serious options traders who want clarity, speed and an edge. The ADX filter is one of five new technical indicators you can combine with everything else you already screen for. ⸻ 🚀 GET STARTED 🌐 Try it free for 2 weeks: https://optionsamurai.com 📖 Backtesting the ADX Filter on Any Stock [Free Backtest File Included]: https://optionsamurai.com/blog/backtesting-adx-filter/ 📖 ADX indicator docs: https://samurai.froged.help/docs/en/16236094-average-directional-index-adx-indicator ⸻ 👍 Like this video if it helped you 🔔 Subscribe for more options trading strategies and tools 💬 Which indicator should we cover next? ⸻ Chapters:













