My Options Play

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Quote from pinabetal:

I have my own software that analizes pure price action. I also compare that analysis with tape reading techniques that I use.
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Did you write your own software?

Or what do you use?
 
Quote from cnms2:

Multi:

I found this older thread discussing an ADX trading system. Did you follow it? Comments?

http://elitetrader.com/vb/showthrea...e=6&highlight=dmi\[\^\\s\][^\s]*&pagenumber=1

nyc-hotshot's first post describes the system:

"08-22-03 07:36 PM

I had mentioned the DMI in a Stochastics thread and got like 10 people mailing me about it, so I figured the best way to discuss it would be a new thread.

Anyway, I use the DMI/ADX almost exclusively (DMI is the Directional Movement Index & ADX is the Average Directional Movement Index ). The only additional indicator I use is Nasdaq futures. I have used this theory for day trading for several years and I consistently make money. I am profitable almost everyday, although I have had a few ( very seldom) net negative days when you count commissions.

DMI/ADX works great for any trading from day trading to swing or position trading. I combine the ADX/DMI onto one study. I make the ADX line white in color, the PDI line red, and the MDI line green. I use the PRO software offered by Realfasttrader. That software makes it real easy because it already combines ADX/DMI into one indicator. Although, I'm pretty sure most softwares out there also have DMI/ADX (it's very common), I think it's easiest to use when they are combined.

This is how I do it:
When white (ADX) crosses the other lines and is at the top and green (MDI) is at the bottom (red in the middle), it's a buy. White on top red (PDI) on the bottom (green in the middle), it's a sell. Often the simplest things work best and this seems simple and it is, but it works very good. I consistently make between .02 -.05 cents on 2000 - 5000 share trades. I usually go for more around the open (maybe .05-.10 or more). I ONLY trade widely traded Nasdaq stocks, like CSCO and INTC."
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Thanks so much, cnms2. I consider DMI the best indicator ever developed in the trading parlance.

I should get back to trading this week.
 
Quote from cnms2:

Multi:

I checked out the Wilder's 14 day Smoothing Line and it is very close to the 22 day EMA I normally use on the dailies. It is even closer to the 30 day EMA.

Is there any reason for which you prefer it? The Wilder's 14 day Smoothing Line is quite different from the 14 day EMA.

Thanks
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:)

Interesting. This confirmed my observation ...

http://www.incrediblecharts.com/technical/dms_construction.htm#Note

*Welles Wilder's Indicators

Users should beware, when setting time periods for Welles Wilder's indicators, that he does not use the standard exponential moving average formula. For example, Wilder describes 1/14 of today's data + 13/14 of yesterday's average as a 14-day exponential moving average. If you refer to Exponential Moving Averages you will see the formula equates to a 27-day exponential moving average.

Indicators affected are:

Average True Range
Directional Movement System
Relative Strength Index
Twiggs Money Flow

We recommend that users try shorter time periods when using one of the above indicators. For example, if you are tracking a 30-day cycle you would normally select a 15-day Indicator Time Period. With the DMS, adjust the time period as follows:

DMS time period = (n + 1) / 2 = (15 + 1) / 2 = 8 days

 
Quote from Multioption:

Thanks so much, cnms2. I consider DMI the best indicator ever developed in the trading parlance.

I should get back to trading this week.
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Multi,

Could you please share a little more about how you're using DMI in your trading? I.e. in all time frames or only one, which? I think you mentioned using 14 bars as parameter, but could you give a little more about what are you looking for: crossings, slopes, levels, relation between +DI, -DI, ADX?

Is there a way to plot the DX in Prophet Charts, not the ADS? Is it possible to vary independently the +/-DI number of bars, and the ADX number of bars?

The "DMI/ADX consistently works" thread proved to be based on a confusion: either nyc-...'s software had a bug in the ADX calculation, or he didn't quite know what he was using.
 
My forecast for monday 31st October was:
BRCM-UP
VZ-UP
KCI-bearish
HUM-UP
CVX-UP
LYO-Track sideways but might in addition make a small higher high but still a sideways tren evident.

Results as of 10:20 A.M. Central Time monday 31st october

BRCM is UP
VZ is UP
KCI - showing bearish signs. I still maintain it is bearish and will indicate so before the day ends.
HUM is UP
CVX is UP
LYO-made a higher high but before the day is over I still then it will look like a sideways track with a small higher high however I could be wrong on this one
 
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