Boom Time, here is the 'lowtrade' post. Kinda interesting take.
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Posted by: lowtrade
In reply to: ohio12 who wrote msg# 1438 Date:11/27/2005 9:07:14 PM
Post #of 1478
ohio12
DMI as with all indicators that use PPs in the calulation can be mislead or form incorrect indications on SPIKES or major runs. I use the 3 day short term Aroon to keep an eye on trend, while the DMI corrects, after a flux problem.
What happens is the ADX & DMI will continue to be positive during a retrace, after a spike move. The aroon does not use PPs in it's calculations, so you will see a conflict in these 2 indicators, if a retrace looks like it's happening. DMI will look positive and aroon will show the change in trend. If the aroon doesn't conflict and continues to indicate a up trend the move up is good. One day, profit taking, retrace will turn back up.
Every time I see a conflict in these 2 indicators, I go with the Aroon. It's more accurate the 3 days after a large move or jump. Then you will see them start to agree again. This is the only time I use 2 simular indicators together. IMO
GTE is where I would watch the aroon, right now. Watch for aroon up trend to show reversal or head toward one, if the expected retrace starts. If it doesn't, I would expect the move up to continue. And the retrace to be short profit taking.
AI
