Advanced technique #9 (System Selection Technique)
Submitted by Edward Revy on September 18, 2008 - 10:21.
Choosing the right strategy for trading is a strategy by itself. (from Edward)
All credits and special thanks to Arsalan, the author of this technique.
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Hello everyone and thank you Mr.Edward Revy for publishing my ADX+EMA SYSTEM.
I want to share one very good idea with everyone.
This is not a trading strategy but a technique to determine which system to use and when. There are many systems available to use some are trend following systems like moving average crossover and some are oscillator based system which utilize indicators such as Stochastic, Rsi and William %R but if all these systems are good then why they work sometimes and sometimes they fail?
The reason is selection of a good system at wrong time.
Read entire post >>>
Thank you for this system selection technique. I think it's brilliant. What an edge. Every system is to some extent "curve fitted" to a specific set of conditions in the market. The ability to plug the right type of system to the conditions seems so advantageous. Finally, it seems that this would work best on long time frames such as the Daily Charts, where specific conditions will play out over longer periods and one will have the chance to react to the change and implement the right system. This is brilliant stuff. Thanks again...
Eric A.
Thanks very much for your explanation. You are very kind and nice person. Regards.
Anis
Hi Arsalan,
Great finding. I track nifty and I use Metastock 9.0 (it is pirated version) and I've subscribed to EOD data from a data provider for Nifty and Sensex.
I've not used ADX before so I need one small clarification. You said when ADX is rising or ADX is falling, what exactly are you refering to the +DI/-DI movement or the Primary ADX line.
Thanks & Regards.
Rajat.
Hi Arsalan,
You mentioned that you trade primarily on nifty trading.
I am also beginning to trade on nifty futures, can you please suggest which charting software you are using for your technical studies that is reliable enough to subscibe.
Thank You in advance
Hi,
advanced #5 is one of the favorites :)
ADX 14 is a standard number for any time frame. If you want it sharper and faster, try ADX 7, if you want it smoother and slower, try ADX 20.
Cheers,
Alex
Dear Arsalan, Edward,
Could you tell me that I can use this technique on H1 chart? Which settings of ADX do you recommend in H1 chart? And could you tell me what is the best trend following strategy on H1 timeframe from this site? I see the best oscillator based systems is Teodosi simple system.
Best Regards, Mandakh
The indicators were shown as an example in this case.
One needs to choose own set of tools, definitely with some additional confirmation setups.
Regards,
Edward
Hi Edward and Arsalan,
This method looks very healthy, thanks for posting it.
Just a few questions :
-When you are trading with Oscillators (ADX < 20), do you sticks with the ones one the graph ? Meaning BB 20,2 - RSI 5 and Full Stochastics 5,3,3 ?
-Same for trend indicators (ADX > 30), do you just stick with MACD, or do you look for more confirmations ?
Cheers
Thank you for yor insight.
H.B
Hi,
Use this only for daily time frame
Happy Trading,
Regards,
ARSALAN
Can you give me a suggestion, what timeframe for this system will be used ?
Regards;
Hi,
You will have to consider only ADX LINE in this strategy.The other two lines i.e +DI and -DI are of no use in this strategy.
(Special Thanks to the user who posted the link regarding the uses of ADX Indicator.)
Happy Trading,
Regards,
Arsalan.
Check in the mean time ADX trading here:
ADX (Average Directional Index)
hello,
great system. please i'm not very conversant with the uses of ADX. please can you explain to me its uses. because when i checked it on he chart i noticed 3 different lines.I wonder which line will I consider.
Pls you can mail your response to lanrefabiyi[at]yahoo.com.
Thanks
You are welcome Andy
Arsalan
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