Just put up the ADX on a chart. How are you supposed to use this thing? Can someone summarize it or post a chart? Thanks.
Why doesn't anybody post a chart that shows that this actually works? The attached chart doesnt, perhaps the poster mixed up red and green??
GO TO BIG CHARTS. USE DAILY CHART. 6 MONTHS. TYPE IN TEVA. IN APRIL ADX(BLACK LINE) MOVED ABOVE THE BLUE LINE WHICH WAS ABOVE THE RED LINE. THAT IS THE BUY SIGNAL. IT DID THE SAME THING IN JUNE.
Sorry, I didn't mean to start a discussion and then abandon this thread, but I went away to the Jersey Shore this weekend. I'd be happy to answer any questions about the DMI method of trading. It can be a little difficult to answer questions when we discuss other softwares platforms because it will look different depending on the colors of the PDI-MDI-ADX lines. If you can set them like this, I have found it is easiest (for me at least): ADX: white PDI: red MDI: green PS: Great DMI call this morning on CSCO bought it at 18.65 @ 9:55AM and sold it at $18.76 @ 10:24AM
I don`t know what that means. I manually went back 100 days and backtested before executing any trades. Then applied the strategy in real time and over a 100 trades it showed the same exact win/loss ratio and profitability. I do not trade it anymore because if other commitments but given the chance I would again.
Just to add a little more flavor (and get my post number off of 666). My interpretation of a trending ADX is > 20. Alot of people use it for a directional play i.e "ADX is going up I will buy..or ADX is going down I will sell". My interpretation is the ADX is a "trend strength O`meter". ADX going up means the trend is getting stronger and if I am looking to buy or sell I would do it on a dip/bump in the price chart and a dip in the ADX.
I agree, ADX cannot make a call alone. ADX is a determining factor, but you need something to base it against (PDI, MDI).
hi Vienna I don't know about the colors but when the stock or market is advancing the + D is over the the - D. So in an advancing market you would short when the ADX breaks the +D line making the +D the middle line now. This will not work in strong trending market so keep those stops.... nick
You guys are making this much too difficult. If the ADX is rising, a trend is in place. As long as the ADX is rising, the trend is most likely still in place. If the trend is up, the DM+ will be up as well. When it makes a lower high, you've got a divergence if price is still rising (DM- will most likely be making a higher low at around the same time). Shorting while the ADX and the DM+ are still rising is not what one might call the "prudent" thing to do.