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Strategies & Market Trends : NetCurrents NTCS

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To: robin 187 who wrote (3571)	11/3/2000 11:41:07 PM
From: Teresa Lo	of 8925

"...I'm really trying to understand how to use ADX..." Quote.com and IQ Charts have both ADX and +/- DI. I don't use indicators to provide entry/exit signals, per se, so I have dispensed with +/- DI in my own trading. I strongly suggest that you read LeBeau and Luca's book, look at the formula and know why it goes up and down. It's the only way you will ever understand how it works: amazon.com "...When it's extremely extended, I take the position that it's currently overheated and it's best to take profits and possibly reverse one's position..." This is generally correct, although it must be viewed in the context of other timeframes. It might be super extended on a 5-minute chart, but not on the 15M chart. "...I don't understand yet what it means when ADX falls from it's high and is just trending in a flat range other than to assume there's some consolidation going on..." You are correct here. ADX rises when there is a strong up or down directional move. When ADX falls after a strong move up or down, it simply means that its is no longer very strong in whichever direction. This may mean a consolidation, depending on what the next timeframe up looks like. This is why we use other techniques for signals, but the ADX itself is very helpful in telling us which techniques we should use: trending or chopping ones. Market Mechanics: ispeculator.com Teresa

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