Adx & Macd
- Thread starter drew4784
- Start date
hi there drew I use both of those in my trading. I trade off a half hourly chart, usually keeping positions for a couple of days to a week, and have had good success using the standard 14 period directional movement group of indicators, and the 12,26,9 settings for the macd.
Generally I have found the best way to use the macd in any timeframe is as a general guide( looking for divergence, etc), as opposed to using it as a direct entry signal. I use the dm+/dm- as my first filter for a trade, making sure the macd is starting to turn up and isn't showing any divergence, and then using the adx once I'm in the trade to gauge how long I hold. If the adx doesn't start to trend up after the dm+/dm- crossover, then I find it to be a good signal that smaller profits are to be taken, and I look for any trend weakness, before taking quick, smaller profits. If the adx rises up quickly after the trade, then I'll let the trade run for alot more.
IMHO the adx group of indicators is one of the best you will find, although it does take some time to get familiar with it, and to get the most out of it!
hope I've been a help here.
have a good day
Generally I have found the best way to use the macd in any timeframe is as a general guide( looking for divergence, etc), as opposed to using it as a direct entry signal. I use the dm+/dm- as my first filter for a trade, making sure the macd is starting to turn up and isn't showing any divergence, and then using the adx once I'm in the trade to gauge how long I hold. If the adx doesn't start to trend up after the dm+/dm- crossover, then I find it to be a good signal that smaller profits are to be taken, and I look for any trend weakness, before taking quick, smaller profits. If the adx rises up quickly after the trade, then I'll let the trade run for alot more.
IMHO the adx group of indicators is one of the best you will find, although it does take some time to get familiar with it, and to get the most out of it!
hope I've been a help here.
have a good day
Quote from professor frink:
hi there drew I use both of those in my trading. I trade off a half hourly chart, usually keeping positions for a couple of days to a week, and have had good success using the standard 14 period directional movement group of indicators, and the 12,26,9 settings for the macd.
Generally I have found the best way to use the macd in any timeframe is as a general guide( looking for divergence, etc), as opposed to using it as a direct entry signal. I use the dm+/dm- as my first filter for a trade, making sure the macd is starting to turn up and isn't showing any divergence, and then using the adx once I'm in the trade to gauge how long I hold. If the adx doesn't start to trend up after the dm+/dm- crossover, then I find it to be a good signal that smaller profits are to be taken, and I look for any trend weakness, before taking quick, smaller profits. If the adx rises up quickly after the trade, then I'll let the trade run for alot more.
would you say you get a good success rate using that system? i am relatively new to trading and have just discovered these two indicators. my plan is use it in a similar manner as you do prof.
IMHO the adx group of indicators is one of the best you will find, although it does take some time to get familiar with it, and to get the most out of it!
hope I've been a help here.
have a good day
generally I've found that I get a hit rate of about 65%, with my average win over the last few years being nearly 3 times my average loss.I should also point out now that I'm in australia trading the asx, which has been in the middle of a rampant bull market, so my figures are probably going to be a bit more impressive than if I was trading in the U.S
prior to the recent commodities boom over here, it was more like 55%, with my average win being twice my average loss.
If you end up going with the adx(and hopefully the dm+/dm- to go with it!), look up some info on wilders extreme point rule, as it helps to weed out some of the whipsaws that you'll get in a non trending market.
Another thing I've found that really helps the adx system is to overlay a group of moving averages on the chart. using a 10/30 ema crossover, or 5/15/30 ema(looking for averages to be stacked in the right order), will greatly help with the success rate of the system.
For me, the macd is just another guide that I use to help the adx system by looking for divergence before I enter a trade, but how you use it will be ultimately up to you.
prior to the recent commodities boom over here, it was more like 55%, with my average win being twice my average loss.
If you end up going with the adx(and hopefully the dm+/dm- to go with it!), look up some info on wilders extreme point rule, as it helps to weed out some of the whipsaws that you'll get in a non trending market.
Another thing I've found that really helps the adx system is to overlay a group of moving averages on the chart. using a 10/30 ema crossover, or 5/15/30 ema(looking for averages to be stacked in the right order), will greatly help with the success rate of the system.
For me, the macd is just another guide that I use to help the adx system by looking for divergence before I enter a trade, but how you use it will be ultimately up to you.