Trading with ADX

Klewtar

Well-Known Member
#1
Since Sharekhan's Trade Tiger 2.2 introduced 30 day intra charts, it allowed for more effective use of indicators such as ADX (previously ADX appeared on only 1 hour intervals on 5 day charts.)

I have yet to read the book ADXcellence. I have read some TJ posts that suggest this book for profitable trading with ADX and ADX can be used standalone (I tend to think that ADX can signal when to use a trend following indicator and when not to.)

I have noticed that using 2 hour and 4 hour intervals can be very effective for generating entry signals.

In the image below, ADX is rising from between 0 and 20 and it intersects the +DI. It looks like the NIFTY is going short. I have read on TJ that when ADX rises to 20, if DI- is above DI+, then short:


As per past performance, ADX rising between 0 and 20 while intersecting -DI generates a buy signal:

(Edit: A 90 minute chart was used in the last image since it gives similar results but 120 minutes is a more stable time frame despite some lag.)

It would be nice to have some tips on how to trade with ADX
 
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