Directional Movement

Hi Everyone,

I have been trying for the last 4-5 years to find the perfect system.

That is the perfect system for me - every trader has his/her own special way of trading or analysing the same peice of information.

I want to trade on 1 hr charts as I work from home and I want to be able to decide whether to excute a trade quickly.

I can do this with this system in about a minute befroe the new candle opens.

I have tried using just price action and also every indicator ever coded but there are two indicators that I keep coming back to.

I have gone back over the last year on G/J and I have an 80% success rate.

I have concluded on average that in a normal week there will be 5 trades - 4 will win or break even and one will be an outright loser.

The avergae loser will be 50 to 60 pips.

This means as long as I lock in 60 pips per week I should not have negative week on average.

Indicators will follow.

This is a screen shot of the places where I executed trades for the week.

The buy and sell happened at the close of these candles.

I do not have a solid exit as yet - I simply use the average approach - so any comments are welcome for this.

In the chart 6 trades I made ended up making a profit (or breaking even) whilst one was a simple loser.

Can anyone guess which 2 indicators I used?

I will post them if anyone shows and interest.

I look forward to peoples thoughts.

Al

Since you named the thread "Directional Movement", I'll guess you're using the ADX.
It looks interesting. Let us know what you're doing.
Thanks

I tried to come up with soem weird and wonderful name like others have proceeded but I thought lets name what it says on the tin.

Quite a clever name which I thought may have tricked people by it's simplicity - obviously not.

You are right it is ADX (period 14) combined with another popular indicator.

This system is so simple to execute - any ideas on the second indi?

Only one trade this week so far.

I personally made 150 pips.

This system does work on other pairs on the same average win/loss ratio.

You do however have to alter your breakeven/ take profit strategy accordingly.

The settings for the indicator can remain the same.

Here it is:

I sold on the close of the candle with arrow above it.

Looks good. Tell us how you do it.
As far as guessing the other indicator, since it's simple, I'll guess a MA.

Only one person guessing.

Well it is simple but also exponential in another kinda way.

It is using MACD setting 12,26,9.

And these two indis are all you need.

This looks interesting...
Do tell us the rules of the system!

hi there
i use this method for over 3 month,,, 6 gmt candle in GBP/GPY and gbp/usd have this behavior if this method use with pivot and psy... points very profitable..U R not first one who discoverd that!!!!!!!.. .. and its better using in gbp/usd...............

Rules:

The rules are as follows:

Buy

Buy when the following occurs.

1. +DMI is greater than the -DMI -The +DMI has to be greater than a level of 20
2. The ADX has risen since the last bar and is over 20. The only time you can trade when the ADX is under 20 is if it has moved 3 points of it's low
3. No trades when ADX above 40
4. MACD agrees with the move - i.e. MACD is above signal line.

Sell

Sell when the following occurs.

1. -DMI is greater than the +DMI -The -DMI has to be greater than a level of 20
2. The ADX has risen since the last bar and is over 20. The only time you can trade when the ADX is under 20 is if it has moved 3 points off it's low
3. No trades when ADX above 40
4. MACD agrees with the move - i.e. MACD is above signal line.

Exit - I normally use standard s/r or movement in the DMI.

Stop loss - Low/High of indicating candle + spread

Get to break even around 30 - 40 pips.

Like I said this has a good win/loss ratio.

I never cliamed to be the one who discovered it.

So many others are crowding their screens with indicators which pretty much tell the same story.

All you need are two.

by the way
this is a good system ...i can say thank u for sharin

Rules:

Sorry people I forgot an important item on entry.

MACD is only used as a confirmation indicator.

If the MACD is not correct at the time you get a signal of DMI/ADX you should leave the trade alone completely until the next set up on DMI.

It is tempting to go in after MACD is correct also but in the long run more trades will fail.

GBP/CHF so far this week 3 trades.

Open trade on close of candles marked with arrows.

I have now exited the gbp/chf trade for a 40 pip profit.

Onto tomorrow.

hey there

i used to use DMI, but could never figure it out to reap consistent profits with a high % success. any possibility you could post some screenshots with the indicators and perfect trade examples?

interested in this thread...

Do you only use this on hourly charts. I am used to trading shorter timeframes. How do get your trade signals? Do you just check your charts every hour? Thanx

i am interest with this thread.. hope to get screenprint of chart include indicators..

Hi ACartwright, I don't understand your exit rule.
Could you explain whtat do you mean with "standard s/r or movement in the DMI"?
Thank you.

Hi Pipping,

I will get soem screenshots over shortly.

DMI works as the indi that gets you in - rising adx shows the net directional movement in one way or the other. The MACD on the other hand shows the overall trend.

In conjunction they compliment each other really well.