ADX/DMI combined with MACD

[daytradingUK]

I have been using DMI crossover with MACD as confirmation (and the ADX line to check the trend is true) and have had some good success and some terrible failures too.

Has anyone else utilised this system and if so what success have they had.

My experiences have been doing intraday trading on FTSE100 stocks using CFD, I select my stocks using a beta of greater than 1 to ensure there is some volatility.

Cheers
Dico

 

[Tyler19]

I just started using DMI cross to trade YM, Ill let you know how it goes. 5 Minute chart

I have been using DMI crossover with MACD as confirmation (and the ADX line to check the trend is true) and have had some good success and some terrible failures too.

Has anyone else utilised this system and if so what success have they had.

My experiences have been doing intraday trading on FTSE100 stocks using CFD, I select my stocks using a beta of greater than 1 to ensure there is some volatility.

Cheers
Dico

 

[TWI]

The most comprehensive work i have read on DMI is from LeBeau and Lucas. They wrote a a book in the 90's about computer analysis of the futures market when it was all pretty new to the private investor. This book is what started me down the road of mechanical systems development. They combine +DI and -DI with ADX.
Here is an article.
http://www.streetstories.com/lb_futures96.html

 

[forex87]

i use adx/dmi with 2 other indicators. adx/dmi doesn't establish trend direction. it can sometimes give a signal opposite the trend direction.
use moving averages or something to establish trend direction.
i use ichimoku for trend direction. (similar to MA's)

 

[trendie]

I use ADX to tell me whether a market is ranging ONLY.

DI-, DI+, ADX under 25/30, on the 4-hr charts on FX is generally good indication of ranging market.

Since I use MAs, keeping out of ranging markets is useful for me.

MACDs: dont use it.

success: only helps me to stay out of losing whip-moves, so doesnt ADD anything to my profits, but is successful by keeping me out of losing trades.

 

[forex87]

that's great.

no one talks about how "not trading" is also a trading strategy.

 

[dealer4fx]

I use +DI/-DI with SMA to create a signal. While ADX is just a filter.
The result is great.

 

[grayghost]

I have been using DMI crossover with MACD as confirmation (and the ADX line to check the trend is true) and have had some good success and some terrible failures too.

Has anyone else utilised this system and if so what success have they had.

My experiences have been doing intraday trading on FTSE100 stocks using CFD, I select my stocks using a beta of greater than 1 to ensure there is some volatility.

Cheers
Dico

Try adding the Ichimoku for determination of trend and for filtering of buy/sell signals. Realize, however, that the Ichi, like all indicators, is more reliable at longer timeframes. (Day trading is a tough game.) The daily TF seems to work well.

 

[fibonelli]

My trading plan is to use the DM Histogram to keep me in a trending market a bit longer than the MACD histogram and oscillators are indicating to me to close a trade.

I don't use the DM Histogram for opening a trade as they are, imho, lagging indicators of trend change.

 

[gaminig]

Slightly marginal to main thread, What indicators are multi-colinear please. Thank you
Gaminig

 

[nkruger]

I use +DI/-DI with SMA to create a signal. While ADX is just a filter.
The result is great.

Can you explain in a little more depth how you use the +/- DI with SMA to create a signal ?

Thanks in anticipation......

NK

 

[dealer4fx]

DI+- and SMA

Can you explain in a little more depth how you use the +/- DI with SMA to create a signal ?

Thanks in anticipation......

NK

DIP is DI+.
DIM is DI-.
SMAL is longer simple MA.
SMAS is shorter simple MA.
The suffix 1 or 2 means the previous tick or before that.

My down trend comes from
DIP1 < DIP2 && HIGH1 < HIGH2 && SMAL1 < SMAS1

While my up trend comes from
DIM1 < DIM2 && LOW1 > LOW2 && SMAL1 > SMAS1

That's all.

 

[nkruger]

I have been using DMI crossover with MACD as confirmation (and the ADX line to check the trend is true) and have had some good success and some terrible failures too.

Has anyone else utilised this system and if so what success have they had.


Cheers
Dico

DAYTRADING THE DOW & DAX

I have tended to use the Parabolic SAR as the 1st signal - to be put on alert as it were - and then look at ADX/DMI together with MACD, RSI and Bollingers to see what's going to happen next ! I also always watch the price action as Candlesticks. I have added Williams %R and Stochastics to my experiments this weekend to see if they are a worthwhile addition. My aim is to have just 3 indicators that work well with the Dax/Dow intraday...... I'M ALMOST THERE !!

 

[rathcoole_exile]

DAYTRADING THE DOW & DAX

I have tended to use the Parabolic SAR as the 1st signal - to be put on alert as it were - and then look at ADX/DMI together with MACD, RSI and Bollingers to see what's going to happen next ! I also always watch the price action as Candlesticks. I have added Williams %R and Stochastics to my experiments this weekend to see if they are a worthwhile addition. My aim is to have just 3 indicators that work well with the Dax/Dow intraday...... I'M ALMOST THERE !!



Exactly the way I trade !! except I have dropped the Williams% in favour of OBV and Chaikin-MF. I only trade on the daily charts so I only use the Slow Stoch to avoid whipsaws.

One further refinement that I find helps: many traders seem to use too many indicators and to get too cluttered up. The first time I look at any chart, I remove the candlesticks so i can get a sense of what the MAs and SARs are telling me, I find it gives a very clear sense of perspective.

Good Luck !!!!!

what am I saying ?? You're using SARs, DMI/ADX with MACD, Stochs and Bollies. You don't need luck !

 

[nkruger]

Hello Rathcoole, I have refined it even further with the help of other members. Have a look at my thread about the IBEX in European Indices. Mainly Stochastic based now, and getting In VERY EARLY on a change of direction !!

 

[tenny45]

The two are the best combination if you know how to read them.

 

[nkruger]

The two are the best combination if you know how to read them.

Do you use them in the 'normal' way, or have you a unique slant on it ?

 

[tenny45]

I have been using ADX/DMI since 1985. I plotted and figured them with the formulas using a calculator and spread sheet printed from Mr. Wilders book. I called Mr. Wilder and talked to him in 1987 and ask questions. He was very open and a nice man. I started using the MACD in 1988.
I daytrade 500 to 1000 shares of AAPL daily (1 to 5 trades usually). I use the 1 minute charts (E-Signal) and look for developing short term spikes (up or down) using the ADX/DMI. I use the MACD to confirm my chances of success. I then use a trailing stop which is the key to protecting profits and letting your trade run. I will change the stop sometimes every 5 to 10 seconds as market moves. That is the good thing about trading AAPL. Usually 4 to 8 point daily range and you will always have little short term trend trades during the day. Good Luck

 

[newtrader22]

tenny45 can you post some screen shots of your trades and explain them? thanks

 

[bluetipex]

I also day trade the Dax and the YM (only).

I removed ADX from my charts a long time ago as I found it lags too much.

I now use a selection of emas, Bollies, TWO separate MACD panels, and the "squeeze" indicator which I bought from John Carter's Trade The Markets. For me this combination is truly magical. I am often in awe and wonderment at how accurate the signals are.

I trade a 1 min and 5 min chart. I take crosses of the zero line of the MACD on the 5 min chart. I use the 1 min to fine tune my entry within a 5 min bar. You will only get 2-3 of these on any given day. However, today there were 4 signals all day on the Dax. A short at 8.10am. A long at 2pm. A short at 4.15pm and a long at 6.30pm.

One of the MACDs has fast or aggressive settings. The other slow, conservative settings. I usually use the aggressive one to "get ready", and the slow one to "GO"!!! Sometimes its better to take the aggressive signal, like at 8.10am this morning. Here I shorted Dax at 6990. I take the conservative one after a period of consolidation, like the long today at 2.07pm where I entered long at 6947.

I don't bother with volume, trend lines or S/R lines. I never trade news. I just take crosses of the zero line on my beautiful MACDs. There are many nuances to my system of course which I won't go into here (i.e. use of the emas) but suffice to say I mainly look for zero line crosses of MACD. Nothing else. All day. It will work on any instrument on any time frame too. But I like the 5 min Dax and YM charts. The "squeeze" helps me to NOT trade, in chop or consolidation.

These damn vodka and cokes have made me make this post.... out of character for me!

Oh well, up at 7am tomorrow for the good old Dax.

This system has taken me 4-5 years to refine, and I can't see how I will ever need to change or amend it now.