Why I dislike DMI/ADX

Discussion in 'Technical Analysis' started by Buy1Sell2, Apr 30, 2006.

  1. Buy1Sell2


    lags way too much. It is probably useable only as a warning to not countertrend trade once the trend is underway (half over).
  2. I think DMI is realy good as a part of other indicators, such as parabolic SAR, Slow Stochs, and MACD to work together. I do not think that on its own it helps much...
  3. cnms2


    In TA you can get the same information using different combinations of indicators.

    You can use ADX/DMI successfully if you correctly include it in your strategy. As with any indicator, you have to fully understand it, how it is calculated and what it shows, then interpret its signals. You may have to tweak its parameters to your market characteristics.

    If you're trading a trending asset use ADX/DMI to detect trends, if you're trading a non-trending asset use it to determine reversal points.

    There are several ADX/DMI based trading strategies discussed on ET, both for trend and for reversal detection.
  4. colion


    Not too bad if parameters are optimized for specific markets and time frames.
  5. Buy1Sell2


    What would be you recommendations for parameters on ES and British Pound?
  6. hkrahra


    Why don't you ask Jesse Livermore?