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A. A. Identify an issue that is taking out new multi-day low (2-day low for day trades, 5-day low for swing trades) and for which the ADX line is between 30 and 40.
B. Check that the (blue) -DMI line has recently crossed to the upside over the (green) +DMI line.
C. Confirm that volume bar size is increasing to at least 30% greater than the immediate past volume bar size.

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A. Sell the position short once the ADX gets over 40, and the stock is taking out a new low on increasing volume.
B. Trail an initial protective cover stop at the previous day's low.
C. As the position moves in your favor, trail a protective stop at the high end of the prior bar/candle.
D.

Use the same ADX and volume-based trailing stop strategies as described in the buy strategy because the ADX/DMI and volume indicators are identical.
Combining ADX/DMI with volume bar increases helps to identify both the emergence of a new breakout entry and the flattening of a trend, once the ADX drops to under 40 and volume starts to decline. Using these technical indicators together as a system can help filter out false breakouts and ensure that breakout entries are the strongest at the time of entry..

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  Disclaimer: The strategies are believed to be accurately presented. However, they are not guaranteed as to accuracy or completeness. Nor is it guaranteed that using them will result in profits or that they will not result in losses. Past performance is not a guarantee of future results. Only risk capital should be invested in the market. All investments and trades carry risk, and all trading decisions of an individual remain the responsibility of that individual.
     
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