DMI/ADX consistently works
- Thread starter nyc-hotshot
- Start date
In the attached chart (Dax Future 12-09-03 - my last trades
of the day) I have indicated my entry and also my exit trade.
I do only a trade when :
1.- ADX and ADXR are both below the green 20/30 line (see nr.
1-2-3) and are both rising above !
2.- The price is above (=LONG), below (=SHORT) the blue EMA
which is 13
When my order is FILLED (always MARKET Order), I place
immediatly a LIMIT order of 11 POINTS MORE for a BUY or LESS
for a SELL.
In trade 2 my limit order was filled with a gain of 11 points.
In trade 1 and 3, my limit order was NOT FILLED (No 11 POINTS)
but I went out of the market because ADX crossed ADXR DOWN
see the 3 cirkles (MARKET ORDER) and I cancelled my LIMIT order.
I hope this gives you a better idea of how I trade the DAX
Cheers
Jeanmichel
I
of the day) I have indicated my entry and also my exit trade.
I do only a trade when :
1.- ADX and ADXR are both below the green 20/30 line (see nr.
1-2-3) and are both rising above !
2.- The price is above (=LONG), below (=SHORT) the blue EMA
which is 13
When my order is FILLED (always MARKET Order), I place
immediatly a LIMIT order of 11 POINTS MORE for a BUY or LESS
for a SELL.
In trade 2 my limit order was filled with a gain of 11 points.
In trade 1 and 3, my limit order was NOT FILLED (No 11 POINTS)
but I went out of the market because ADX crossed ADXR DOWN
see the 3 cirkles (MARKET ORDER) and I cancelled my LIMIT order.
I hope this gives you a better idea of how I trade the DAX
Cheers
Jeanmichel
I
Hello-
You had preiously said that you use a moving average filter:
" 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 !!!!!"
Is there an additional Blue EMA of 13, or is there a misprint?
I use in the price chart 3 EMA's
1.- GREEN = 5 EMA (LIPS)
2.- RED = 8 EMA (TEETH)
3.- BLUE = 13 EMA (JAW)
It is the ALLIGATOR SYSTEM of Bill Williams
(see also his book "NEW TRADING DIMENSIONS"
In the indicator under the price chart, there I use
a YELLOW =10 EMA and a DARK BLUE = 34 EMA with above
a ADX(8) and ADXR(8), that is correct.
I use that only for the CONFIRMATION !!!!
Cheers
jeanmichel
1.- GREEN = 5 EMA (LIPS)
2.- RED = 8 EMA (TEETH)
3.- BLUE = 13 EMA (JAW)
It is the ALLIGATOR SYSTEM of Bill Williams
(see also his book "NEW TRADING DIMENSIONS"
In the indicator under the price chart, there I use
a YELLOW =10 EMA and a DARK BLUE = 34 EMA with above
a ADX(8) and ADXR(8), that is correct.
I use that only for the CONFIRMATION !!!!
Cheers
jeanmichel
Jeanmichel,
Thanks for taking the time to clarify your method. I do have a couple of questions about it that maybe you can explain. I think I understood you to say that the geen lines on the ADX pane of your chart are set at 20 and 30. But it looks like 2 of your entries are occuring on crosses near the bottom line, which looks like its around 10 or 11 (see notes on attached chart).
Also, I see that on entry 1, you enter on the ADX cross of the lower threshold (ADX had already crossed ADXR earlier). On trade 2, the entry comes when the ADX crosses the ADXR, before either crosses the threshold. And on trade 3, the entry comes when the ADXR crosses the middle threshold, but ADX does not cross for another bar or two and does not cross the ADXR until midway through the move. Are these trades taken on a discretionary basis (i.e. it "feels" right given the current position of the indicators) or is there an objective criteria that I overlooked?
I am not saying this to be critical. Quite the contrary, if you are doing this on a discretionary basis and having success then I applaud you for that. It is good trading. But if you are taking all 3 trades based on the same rules, then I must be missing something because I would have not gotten the trades right. For example, at 18:07, the ADX crosses the middle threshold after turning up and crossing the ADXR. Why was this trade not taken?
I appreciate any other clarification of you decision making process.
Thanks for taking the time to clarify your method. I do have a couple of questions about it that maybe you can explain. I think I understood you to say that the geen lines on the ADX pane of your chart are set at 20 and 30. But it looks like 2 of your entries are occuring on crosses near the bottom line, which looks like its around 10 or 11 (see notes on attached chart).
Also, I see that on entry 1, you enter on the ADX cross of the lower threshold (ADX had already crossed ADXR earlier). On trade 2, the entry comes when the ADX crosses the ADXR, before either crosses the threshold. And on trade 3, the entry comes when the ADXR crosses the middle threshold, but ADX does not cross for another bar or two and does not cross the ADXR until midway through the move. Are these trades taken on a discretionary basis (i.e. it "feels" right given the current position of the indicators) or is there an objective criteria that I overlooked?
I am not saying this to be critical. Quite the contrary, if you are doing this on a discretionary basis and having success then I applaud you for that. It is good trading. But if you are taking all 3 trades based on the same rules, then I must be missing something because I would have not gotten the trades right. For example, at 18:07, the ADX crosses the middle threshold after turning up and crossing the ADXR. Why was this trade not taken?
I appreciate any other clarification of you decision making process.
Is the discretion in the trades taken or the trades reported? I don't mean to discount Jeans trading results but when people post winner after winner with no mention of the losers I can't help but be just a wee a bit skeptical
btw.. guess you don't want to hear about my methodology because I was sliced and diced today by Mr. Dax.
WarEagle,
The 3 horizontal lines in the ADX/ADXR indicator are set on :
20 - 30 - 40, but they are overlayed on the +DMI and -DMI
and the scale you see in the indicator (right) is the scale of the
yellow +DMI, that is not my fault, that is so with Metastock.
(you don't see the scale of -DMI and ADX and ADXR).
Now for the first trade (Nr. 1) you see that the ADXR is FLAT
between 16.30 and 16.37, I take the trade when both ADX and
ADXR are rising UP under the green 20 line and even the yellow +DMI is rising UP at 16.40
The second trade is for me a good trade because at 17.11
both ADX and ADXR are rising UP under the green 20 line, even the yellow +DMI is rising UP., also trade 3 is a good one both ADX and ADXR are UP under the green 30 line and the red -DMI is rising
I trade the DAX only till 18.00 PM, so I didn't take the trade
at 18.07 (all European bourse are closed at that time except
Frankfurt !!!!), but I must say that 18.07 is for me not a good trade because ADX was near ¨(NOT UNDER) the 20 line and rising UP at 18.02 but not the ADXR he was descending and the most important of all, he was not under the green 20 line before 18.07 !!!
IMPORTANT FOR A GOOD TRADE !!!!
ADX and ADXR must BOTH UNDER the green 20 line, see trade 1 and 2 (or green 30 line - see trade 3) AND BOTH RISING UP !!!!
and in the price chart the candle MUST CLOSE ABOVE (LONG) or UNDER (SHORT) the BLUE 13 EMA !!!!!
I hope it is clear for you now !!!
The 3 horizontal lines in the ADX/ADXR indicator are set on :
20 - 30 - 40, but they are overlayed on the +DMI and -DMI
and the scale you see in the indicator (right) is the scale of the
yellow +DMI, that is not my fault, that is so with Metastock.
(you don't see the scale of -DMI and ADX and ADXR).
Now for the first trade (Nr. 1) you see that the ADXR is FLAT
between 16.30 and 16.37, I take the trade when both ADX and
ADXR are rising UP under the green 20 line and even the yellow +DMI is rising UP at 16.40
The second trade is for me a good trade because at 17.11
both ADX and ADXR are rising UP under the green 20 line, even the yellow +DMI is rising UP., also trade 3 is a good one both ADX and ADXR are UP under the green 30 line and the red -DMI is rising
I trade the DAX only till 18.00 PM, so I didn't take the trade
at 18.07 (all European bourse are closed at that time except
Frankfurt !!!!), but I must say that 18.07 is for me not a good trade because ADX was near ¨(NOT UNDER) the 20 line and rising UP at 18.02 but not the ADXR he was descending and the most important of all, he was not under the green 20 line before 18.07 !!!
IMPORTANT FOR A GOOD TRADE !!!!
ADX and ADXR must BOTH UNDER the green 20 line, see trade 1 and 2 (or green 30 line - see trade 3) AND BOTH RISING UP !!!!
and in the price chart the candle MUST CLOSE ABOVE (LONG) or UNDER (SHORT) the BLUE 13 EMA !!!!!
I hope it is clear for you now !!!