DMI/ADX consistently works

Yes, right on. I believe that even the first derivative would be extrememly helpful to get a handle on which stocks the DMI- and the DMI+ were about to converge the fastest.

Is there a way to do a scan for this?

Thanks

 

Thanks much NYC for sharing!

Thanks Stok for figuring out the ADX DX difference on NYC's charts.

 

Because it works

 

because it doesn't.

a simple backtest will show that.

 

Interesting and amusing thread. A bunch of good posts and a lot of confusion. Bottom line: it doesn't work on my charts.

Good trading everybody!

 

Yes, it is an interesting subject.

When you say that it does not work on your charts, you are really saying that at this point in time, you cannot make it work.

If you were to take a moment to understand how the indicator works, you might have a better chance of success.

Ironically, the person who started the thread knows very little about how ADX/DMI actually works. Also the folks who posted after him (and were throwing around the useless jargon) have not managed to advance their understanding of the indicator at all.

The best way to understand the indicator would be to read Wilder's book "New Concepts in Technical Trading Systems". Absent that, here is a reference that summarizes the concepts for those who might be interested.

http://www.trade10.com/Directional_Movement.html

Good luck folks
Steve

 

Here's another reputable source on TA stuff:

StockCharts.com ADX

 

What I mean is that nyc's 15 bar ADX is neither the 15 bar ADX nor the 1 bar ADX my Prophet charts draws. It seams that Prophet can't draw the DX either. I also unsuccessfully tried the 7 and 8 bar ADX after I found out that Wilder calculates averages differently.

http://www.incrediblecharts.com/technical/directional_movement.htm

• 
  *Welles Wilder's Indicators
  
  Users should beware, when setting time periods for Welles Wilder's indicators, that he does not use the standard exponential moving average formula. For example, Wilder describes 1/14 of today's data + 13/14 of yesterday's average as a 14-day exponential moving average. If you refer to Exponential Moving Averages you will see the formula equates to a 27-day exponential moving average.
  
  Indicators affected are:
  
  Average True Range
  Directional Movement System
  Relative Strength Index
  Twiggs Money Flow
  We recommend that users try shorter time periods when using one of the above indicators. For example, if you are tracking a 30-day cycle you would normally select a 15-day Indicator Time Period. With the DMS, adjust the time period as follows:
  
  DMS time period = (n + 1) / 2 = (15 + 1) / 2 = 8 days
  

So far none of the recommended DMI or ADX methodologies worked consistently for me. Are you currently using any in your trading? I haven't read yet the trade10.com info.

Thanks

 

You may have a point there.
In his later years, Welles himself must have found out about this. Since then he moved on to peddling more exotic proprietary delta stuff.

 

In case you didn't know yet, 'good appearing prospects' never make money, neither in swinging nor in any other trading style.