I am confused as to why you would trade in the direction of the bottom indicator i.e. red or green. I use ADX/DMI and have understood that whichever DMI+ or DMI- is on top, is the direction of the trend, and price action bears this out. Also, you did not mention at what point the ADX must be at to consider a new trend ie. 20? 25? Look forward to your input I have just started using the indicator about a year ago.
Happy New Year everybody! I think it is my first post. But anyway here is the thing. I spotted ADX some time ago that it is a good indicator and currently trying to test it in excel. Anyone has a forumla for it by any chance? Thanks
Hi.. In your post you stated that.. Whenwhite (ADX) crosses the other lines and is at the top and green (MDI) is at the bottom (red in the middle), it's a buy. White on top red (PDI) on the bottom (green in the middle), it's a sell. what about if the adx is in the middle? like for example... the (PDI) red is at the bottom, the MDI (green) is at the top and the adx is rising in the middle it is a call to sell...will you enter the trade? thank you..
Hi.. In your post you stated that.. Whenwhite (ADX) crosses the other lines and is at the top and green (MDI) is at the bottom (red in the middle), it's a buy. White on top red (PDI) on the bottom (green in the middle), it's a sell. what about if the adx is in the middle? like for example... the (PDI) red is at the bottom, the MDI (green) is at the top and the adx is rising in the middle it is a call to sell...will you enter the trade? thank you..
I am studying the ADX/DMI. So far it is one of the best indicator out there . However, there are many buy/sell signal noise on 1-5 mins chart. In 1 - 5 mins chart, the movement of DI+ and DI- change too often in very quick time , making it hard to predict the next momentum. Does this happen too on higher time frame too ? (30 mins and up) Thx
Depends on your settings. For instance - if your setting is 20 on a 5 minute chart you're basiscally viewing the 5 minute trend over a one hour period. Just remember - a DMI cross is a good entry signal but a horrible exit signal.