DMI/ADX consistently works

Quote from dbphoenix:


I'm afraid that's impossible. If you're making entries within the first fifteen minutes, then you're either using current data coupled with yesterday's, or you're making entries that include varying degrees of randomness.
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It's gotta either be using the prior day's data OR doing a shorter lookback period... like for example, after 3 minutes, it uses 3 bars, after 5, it uses 5 bars and then once it finally gets to 14, it sticks with that.

I would tend to agree with nyc that what happened up to the close on the prior day doesn't hold much weight with this indicator that's why I'm thinking it's doing the shorter lookback (unless it's possibly using pre-market data)

I would also like to see a screen shot if possible.
 
Nyc-Hotshot
Thanks for sharing with us your style of trading with adx.
It's really amazing how many great trades it generates.

If you guys trade ES, try it on a 15 min chart(I don't like scalping for 1 tick), same setting.
Unbelievable :eek:
 
ADX is just a combination of PDI and DMI (so it doesn't bring any new information to PDI and DMI): it's an ema of a normalised spread between PDI and DMI.

Just a remark : the ADX has already been questioned at least here:

http://www.elitetrader.com/vb/showthread.php?s=&postid=247056&highlight=adx#post247056

"How good is the ADX indicator? "
I answered as for me:
"One of the rare valuable indicator. "

The reason I answered that is because it translates a part of market's action knowledge ( that is to say for here the trend's definition : higher high or lower low which is fondamentally not within a random walk behavior) more than stochastic indicators. Now I prefer to use market's action knowledge directly instead of an indicator which only acts as a proxy so as a barrier to full information. So I prefer my model but one doesn't have to totally exclude indicator even using the market's action approach: market's action is like the road while indicators are like traffic lights on the road. People who doesn't have this direct market's action knowledge can compensate partly by using adx.

Quote from nyc-hotshot:



I agree, ADX cannot make a call alone. ADX is a determining factor, but you need something to base it against (PDI, MDI).
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This is how I use the ADX and ADXR in my tradings !!!!

I use 2 EMA's : YELLOW = EMA 10
BLUE = EMA 34

When the YELLOW cross the BLUE EMA UP, then look at the
ADX and ADXR (see white cirkle - under 20), when the ADX RISE above the ADXR then go LONG !!!!!

Cheers
Jeanmichel
 

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Very interesting...I have used DMI, but not in this fasion...I have a few questions for ny:

- You use the 1 min for a heads up and then the 2 min for confirm always?

- Do u plot the ADX on your futurus chart?....and are u mainly using the naz futs for entry or exit confirms?

- I see that you say u only plot today's data....so you do not plot any bars from yesterday at all at the open?
 
When you look at the attached chart you can see 4 trades
for this morning on the DAX Future (10-09-03)

There are 3 SHORT (red line and numbers 1-2-3) and there is
1 LONG (blue line and number 4)

I do the trade only when the ADX (Black line) is near the 20 or
the 30 line (see the 4 blue cirkles) and when the ADX is rising
true the ADXR (the light blue line) and of course the red DMI
is above the yellow DMI for short and for longs vice versa !!!!

I hope this helps you understand how to use DMI and ADX

Cheers
Jeanmichel :)
 

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Here is a the same chart but with moving average crossings !!!
and ADX and ADXR

Short = when yellow EMA is descending and under the blue EMA
Long = when yellow EMA is climbing and above the blue EMA

For the long (Nr. 4 = still LONG at the moment !!!!!)

cheers
Jeanmichel :)
 

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Thanks Jeanmichel, really interesting, seems a little bit more complicated ( but perhaps more precise) than nyc system.
I see too you use always your 3MM system.....

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