DMI/ADX consistently works

Discussion in 'Technical Analysis' started by nyc-hotshot, Aug 22, 2003.

  1. 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.
     
    #41     Aug 24, 2003

  2. Did you use walkforward methodology to determine the profitability of your technique???
     
    #42     Aug 24, 2003
  3. Vienna

    Vienna

    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??
     
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    #43     Aug 24, 2003
  4. 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.
     
    #44     Aug 24, 2003
  5. 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
     
    #45     Aug 25, 2003
  6. 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.
     
    #46     Aug 25, 2003
  7. 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.
     
    #47     Aug 25, 2003
  8. I agree, ADX cannot make a call alone. ADX is a determining factor, but you need something to base it against (PDI, MDI).
     
    #48     Aug 25, 2003
  9. NKNY

    NKNY

    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
     
    #49     Aug 25, 2003
  10. dbphoenix

    dbphoenix

    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.
     
    #50     Aug 25, 2003