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Mark Johnson is a full time trader TradeStation developer, and commercial coaches. Personally developed over 60 strategies and over 200 indicators for. ..
A successful trader you need to know when a tendency to start, the strength of the trend, and when it ends the trend. Knowing these events trend is crucial, given that a trend is the fundamental market for most profitable trading methods. Having access to trend information is timely and accurate can dramatically increase your profits when trading.
One of the most commonly used yet obsolete tools for identifying trends is the indicator ADX. The ADX line increases, to demonstrate the strength of a trend. The most accurate through the use of the ADX is to only pay attention to a rising ADX line, since this is where the power voltage is the strongest. More indicators are a row of ADX level threshold somewhere around twenty or twenty-five. When the ADX is over the limit that you have a trending market and decreasing when it falls below this limit does not. It is important to know these details about a trend, we are sorry, but the ADX is too "hit and Miss" traditionally this significant trend information.
A huge problem with ADX indicator is "lag" recover time that occurs after you move a strong up. Look at a chart with a strong uptrend quickly followed by an immediate move quick strong terms. You will see that the indicator ADX lost completely the second down trend movement since the ADX line is still in a phase of recovery. Another shortcoming is that ADX provides no information about the direction of the trend. I know that you can use other indicators like DMI + and DMI-to get the direction of a trend, but I want each marker on my chart to provide the most amount of accurate and timely information possible. So why not use a trademark to indicate that much more than the old old indicator ADX may mean?
Price action indicator is the perfect replacement ADX indicator for the following reasons:
First, what exactly answer when starting a trend, the strength of the trend, and when it ends a trend. Secondly, it gives information without "delay". Getting those signals in early translates into more profitable trading. Thirdly, it says in the direction of the trend without the need for other indicators like DMI + and DMI-. Fourthly, can be placed right in your price lines to see the interaction between the bars, prices and price action indicators.Price action indicator simply and clearly displays all information about this trend. Indicates the start of voltage changing both the color and direction of the line of action "value". Displays the strength of the trend, increasing the thickness of the line of action "value". It does this all without the "backwardness" associated with ADX. Finally, it can be placed directly on values to see the trend of the price bars, making this an extremely superior tool over the ADX. Price action indicator replaces the ADX, DMI-DMI + and most moving averages.
As fantastic as the index action of the TradeStation, line of action our values have been reached above is only one line taken from our multiple stocking action price time frame consisting of lines of action 8 different time frames. Price action indicator provides the largest commercial MTF "edge".
This article has been viewed 9 hour (s).Article submitted on: January 09, 2011
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