Tradin' peaks and valleys

Discussion in 'Technical Analysis' started by thruline, Aug 24, 2005.

  1. thruline


    No_pm_please introduced a number of traders here to the use of ADX to help identify changes in trend. ADX gets up over 30 for a while, expect a reversal of some kind, using whatever confirmation you use so you don't get impaled on a huge move.

    I call this a peak trade.

    Looking at lots of charts I noticed that when the ADX 14 dips below, say 15, on a normal or high volume trading day (not during lunchtime!), it becomes a timer for what's usually a continuation trade after a move. Today there were at least four examples that I've attached in a chart.

    I call these valley trades. It's just one more bit of info that clues me to view a breakout as a good bet.

    I've attached a chart of today's Russell.

    Thanks, no_pm_please!