Trade Mechanically
I cannot count the number of times Bernard has mentioned that to me. I just cannot get it into my head <GG>. DMI- moved above the DMI+ and ADX yesterday at 2PM. That was the signal the the DMI- was taking over the DMI+ and controlling the trend (ADX). Just remember that the trend is controlled by whichever DMI is on top. When they cross then that will be a potential change of trend signal. When we have a Strong trend the controlling DMI and the ADX will be rising. That is when you want to watch for a crossover of the Controlling DMI back below the ADX and the counter DMI rising as the ADX (trend strength) declines. That can be seen with the potential HOD signal yesterday morning. When you have these signals occuring on the 5 day chart then they can be applied longer term. You can see on the 5 day Dow chart where we have had the HOD and LOD type crossovers in the last 5 days. LOD crossover Wednesday at 1, corresponding with an MACD crossover. HOD type crossover on Tuesday at 11, corresponding with an MACD crossunder. LOD type crossover on Friday morning, not verified until MACD crossover at 11. Whenever the DMI/ADX signals correspond, or are verified, by an MACD crossover on the 5 day chart then they are Usually Good signals. Yesterday the signals were a little more mixed but you can still see where we had a potential change of trend at 11 that did not happen, DMI- did not take over the trend. And later in the day when the DMI- did cross above the DMI+ to take over the trend corresponding with the MACD crossunder.
I hope that this helps with reading the DMIs.
Good Luck Scott! :^)
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
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