DMI/ADX consistently works

[cnms2]

Quote from Samson77:

...
I used this system but in order to make it work you had to have the speedtrader charting software as they where the only ones that calculated the equation correctly. I don't remember why that was but check with them on it and they will tell you.

I traded it for about 1 month and paid a ton in commissions so I stopped because net net it wasn't that profitable and seemed to got through difficult cycles.

I do recommend you try it though it may be more suited to your style.

Good trading to you.

Quote from nyc-hotshot:

Yes, through the course of the thread it was determined that the way I use it is somehow different in how my software plots the ADX (DX) line. It's the software offered through www.Realfasttrader.com . If you try the free demo on their site, it may make more sense if you follow my original instructions at the beginning of the thread.

Also Realfast has fairly high rates listed on their site, but if you call the office or email they do come down to similar rates as offered by most other brokers. I pay a pretty competitive rate thru them.

Thank you both. I'll look more into it. It's intriguing that Realfasttrader.com calculates differently a well known indicator, and even more: the fact that their calculation seem more in tune with the market


Kudos to nyc- for fully disclosing a personal winning technique. Few people do it.

 

[cnms2]

Interesting: the way I read the attached chart, CPKI is due for a retracement toward its 22 day EMA, which is in the proximity of its 50 SMA (not on this chart). Chaikin Money Flow as well as other indicators not on this chart show bearish divergences.

But the DMI shows a bullish entry point: DI+ crossed above DI- and ADX ticked up from bellow both of them.

I know that I have no handle on DMI, but maybe this chart shows that CPKI is at the beginning of an up trend, that starts with a pullback on which to enter at a discount, let's say $30.4-30.5.

Schaeffer's Daily Contrarian: A Review of California Pizza Kitchen's Earnings


Motley Fool
Dough Keeps Rising at California Pizza
Published: 10/28/2005

Brief summary:
The article mainly rehashes California Pizza Kitchen's (CPKI: sentiment, chart, options) earnings, but there are some bullish comments made.

" There is certainly a lot to like in California Pizza Kitchen's results, but the big question is whether it can keep up the pace. It may: Although its gains have been impressive, the company looks as though it still has some room to run."

" California Pizza's recent results have been impressive. But even more impressive is that the company still has yet to peak."


Contrarian Takeaway:


After looking at the sentiment indicators for CPKI, I tend to agree with the author. Short interest increased by 47 percent during the most recent reporting period, putting the short interest ratio at 7.46. Of the six analysts even following the stock, half of them rate CPKI as a hold or worse. The stock has suffered a recent pullback, but over the last fifteen months, it has remained above it's 10-month moving average.

 

[mdl060374]

I like the ADX/DMI indicator.

Many people think indicators are useless, but I find that if you use them in your scanning for candidates, they can be helpful.

I never use them for entries, but if you know what u are looking for, they can help give you good candidates.

I also use volume, and certain technical setups in conjunction with ADX filtering.

 

[cnms2]

Quote from mdl060374:

I like the ADX/DMI indicator.

Many people think indicators are useless, but I find that if you use them in your scanning for candidates, they can be helpful.

I never use them for entries, but if you know what u are looking for, they can help give you good candidates.

I also use volume, and certain technical setups in conjunction with ADX filtering.

What are you using for entries, only price action?

 

[mdl060374]

Quote from cnms2:

What are you using for entries, only price action?

I am using an additional filter that finds a form of consolidation intraday.

The idea, (just started using it so not sure if it works), in theory is to find trending stocks that are trading at high holumes and are temporarily resting.

 

[nyc-hotshot]

I see this thread popped up again and I have been getting some PMs about this.

The answer is yes, I do still use the DMI/ADX indicator for intraday trading. I still use it pretty much the same way I described at the beginning of this thread.

 

[junadx]

Can you send me or post a scren shot on ADX in your best situation for a buy and a sell ? I trade Forex with ADX (it works well) but never on CSCO or INTC. I like to try it as it appears very interesting.

 

[piezoe]

Four years after this fascinating thread began i would like to repeat what some very wise contributor, nyc-hotshot in this case, posted. I believe Mr. Hotshots words should be considered whenever one is trying to back test a method or "system" by automated means:

"I think it would be difficult to back test this considering I am really looking especially for the explosive upside moves on the white (DX) line above the MDI and PDI lines. Real life (human) trading is slightly more subjective, its not as simple as a program saying "if this happens, then do this". I don't believe programmed rules translate to real trading (at least not for me with this strategy).

 

[Champion]

DMI is a useful little tool to have up on your screen but it lags the actual turn as indicators generally do. It can be good to have as part of your running analysis to stay on top of the days trading action.

 

[metaltrader]

I hv found the DMI/ADX an absolute god-send, when combined with the trend index indicator - a sort of MACD color coded oscillator - it seems to work amazingly well with high volume futures and heavily traded stocks - there is a free charts site which publishes the trend index at clickcharts dotcom - I have asked the publisher to add DMI/ADX to his indicator list and am hopeful - would be great to see everything in one place.