What DI interval, DX period and smoothing period for directional movement indicator?

hi all
very new to the whole fx world
but very keen to learn all I can
I have a couple of demo accounts which are great learning tools
one system Ive tried is a 20 wma , 60 wma on a 4hr. chart
using cross overs for my sell or buy signals
to this I would like to add a directional movment indicator to decide wether or not to enter a trade
my question is what DI interval ,DX period and smooting period should I use for the indicator ? also are these wma periods appropriate for a 4 hr. chart ?
cheers people

I would try a 24 wma and a 72 wma. As for the directional movement, use a moving average of oscillator set with those settings 24 and 72 and use its cross at 0 as a confirmation. Welcome to the forex world.

First I would suggest that you do a little Math to understand exactly what you are basing your Trades on. 20 WMA on 4 Hr Chart...
WMA...
A 20-Period WMA, is calculated by
taking the Price of the 20th Period and Multipling it by 20 Then...
taking the Price of the 19th Period and Multipling it by 19 Then...
taking the Price of the 18th Period and Multipling it by 18 Then...and so on and so on...
Once this is done, all products are Summed.
Now we take the Sum of ALL the Multipliers 1 through 20 {20 periods remember} = 210
Finally we divide the Sum of products by 210 to give us a Forward Weighted Moving Average.
{This method gives more "Weight" to the most current Pricing.}

Now let's look at the Periods you have selected to apply to a 4 Hour chart.

20 Periods...
20 x 4{Hrs} = 80{Hrs}
80 / 24 = 3.33333 OR 3.33 Days.

60 Periods...
60 x 4{Hrs} = 240{Hrs}
240 / 24 = 10 OR 10 Days

So, in effect, You are basing your Signals on a 3.3 Day WMA Crossing a 10 Day WMA. Is that what you really want?

I would like you to consider this.
There are essentially 6 Trading Days/ Week in Forex.
(6 x 24) / 4 = 36 {ie. there are 36 [4Hr] Bars in a Forex Week}
Therefore there are 6 4Hr Bars in a Forex Day & 72 in a Forex 2 Week Period

Now, what do you want to compare?
A 2 week WMA to a 1 Week WMA
OR
A 1 Week WMA to a 2 Day WMA
OR
A 2 week WMA to a 3 Day WMA.

The choices are yours, but although there are places in life where "I don't know why it works, as long as it does." may be fine, I don't believe Forex Trading Your Future is one of them.

You may want to consider applying this thought proccess to your DI calculation also.


There's your fishing rod. Now go fish.

Now all you gurus are thinking "Yeah, but how do I get my WMA to start calculating @ 7AM Monday Morning Aussi Time? Not the 20th {or whatever} Bar on the Chart as that may be a Thursday at 8PM?"
All I can say is check out the "Wormhole" Indicator I posted in VT Forum New Ind & TS right here @ FF for some clues.

thanks beemac for the feed back given me a lot to chew over, will continue with my reading and studying. a long way to go but I'm exited about the jouney ahead

Thanks, your information is really great. Do you have simplified explanation so that it is more easy to learn?

Hi,

I've made the title more descriptive.

Best regards
Alan