|domba ||Jan 13, 2019 5:37am | Post# 5542 |
Just only share my opinion, if you dont like it skip it.
Before jump to trade i check several condition :
1. which market condition now, trending or choopy. If trending i go to breakout strategy, if choopy i jump to reversal strategy.
2. which direction market heading south or north
3. when place order, and where put sl and tp.
I'm not an indicator guy, but after reading Welles Wilder's book and finding out the adx calculation, i fell in love with it. i hardly use it as a primary indicator. my primary indicator is always price or volume. but the adx seems to work well as a filter for almost any system, especially on daily bars. when adx is low it means the market is choppy, when it is high it means the market is hell bent on a certain direction.
i like ADX because it gives you new information. most indicators are just sunglasses for price. the ones that give you new, non-price related informaiton are the most valuable (eg volume, open interest, implied volatility). then there are a few hybrid indicators, that do tell you about price, but they transform the price in such a way that the indicator no longer really talking about price. these include indicators like ATR and standard deviation, which tell you about range. i also think ADX is one of these hybrids. while it does read the price, the real value is that it can answer the question: is the market trending? i use ADX when trading discretionally and with quant system. every quant method i have relies somehow on the ADX, to me its like salt to a chef!
this is the reason i am such a fan of the adx, because i have studied the math intensly and made a couple alterations of my own.
Maybe this help for filter your VS in Gorilla system