Magic of ADX

DEB

New Member
#1
ADX is an indicator which tells about trendiness of themarket not diection.Plot 5ema of ADX itself on ADX.Use short term M.A crossover(3/13ema) for direction. whenever ADX makes an upward crossover,look for M/A crossover for direction and trade accordingly.Like every other indicator, it also may give W/s .But sometimes you will be wonder by its power. These two combinations gave early signals in the event of a mejor crash/boom in the history of Indian s/market. ( Plot and see posions before black 17th May and 11th Sept.)So I like to advise short term traders not to take any position against the said signals otherwise they have to spend many a sleepless night. In this opportunity I like to draw Traderji's attention in it. He can throw more light into it. With regards, Deb.
 

Traderji

Super Moderator
#2
DEB said:
ADX is an indicator which tells about trendiness of themarket not diection.Plot 5ema of ADX itself on ADX.Use short term M.A crossover(3/13ema) for direction. whenever ADX makes an upward crossover,look for M/A crossover for direction and trade accordingly.Like every other indicator, it also may give W/s .But sometimes you will be wonder by its power. These two combinations gave early signals in the event of a mejor crash/boom in the history of Indian s/market. ( Plot and see posions before black 17th May and 11th Sept.)So I like to advise short term traders not to take any position against the said signals otherwise they have to spend many a sleepless night. In this opportunity I like to draw Traderji's attention in it. He can throw more light into it. With regards, Deb.
Interesting observation DEB, I totally agree.

ADX is a great tool to incorporate in ones Trading System! In fact your writeup makes a good trading system.

Those of you who may be interested in knowing more on ADX can read Computer Analysis of the Futures Market by Chuck LeBeau
 
#4
Very interesting indicator to work on for trend analysis. One can use additional indicators in line with the ADX indication of a trending or trading market. For trending Moving averges and MACD are good while for the later Oscilattors such as stochastics, RSI are useful.

Advice on using moving crossover of ADX is an interesting one.

Can you please give a link to the article by chuck Lebeau that was referred. Thankyou.
 
U

uasish

Guest
#7
Mov(ADX(14),5,E) if you are using MS ,change period as per your chice or
a:= Input("Period",3,50,3);
Mov(ADX(a),5,E)
 
U

uasish

Guest
#9
Raja,
This is the Entry Trig:=
a:= LLV(RSI(14),20)< Ref(LLV(RSI(14),20),-2) AND LLV(RSI(14),20) < 35;
b:= If(Ref(a,-1) =1 AND a =0 ,1,0);
m:= Alert(b,10) AND WillR(14) < -95;
n:= If(Ref(m,-1) =1 AND m =0 ,1,0);
n;
Entry Price next day close
Exit trig=
RSI(14) > 60
Exit Price= Next Day open
SL = (Entry price - Entry Price*.02) Delay by one bar.
Position size = 50000.00 (20% of Equity= 250000.00)
Max Rs Stop= 5000.00
Max open position = 2
Can you see whether ADX improves ?
Asish
NB: Code in MS
 

beginner_av

Well-Known Member
#10
Re: Magic of Adx? Or illusions?

Please do not take this personally.
I HAVE TAKEN IT VERY PERSONALLY
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I really am very happy to see your excellent write up on this matter. Now newbies will shave off at least 4 months from their hunt to find out the problems with ADX. Excellent stuff. expect more such stuff from you!
 

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