Directional Movement | Page 6 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

MACDForest + Directional Movement System in MetaTrader 5 replies

Directional Movement Index For MT4 0 replies

Directional Movement Indicator Strategy 14 replies

GBP/USD daily pip movement vs. EUR/USD daily pip movement 3 replies

What DI interval, DX period and smoothing period for directional movement indicator? 5 replies

Attachments: Directional Movement
Exit Attachments

Directional Movement

  • #101
  • Apr 8, 2009 1:46pm Apr 8, 2009 1:46pm
The best exit strategy that I have found is stil using the subtle changes in the macd histogram.

This is due to it showing the closes moving back to the 9 period ma.
  • #102
  • Apr 9, 2009 1:48am Apr 9, 2009 1:48am
hi acartwright, yes your usdcad attachment reflects the similar situation which i encountered. i did take the trade but it a an emotional ride as price came just 2 pips off my stop before recovering to enable me to take a modest 30 pips profit. was trading euro.

also would like your advice say if there's a bearish crossover, +dmi is 15, -dmi is 25 but adx declined say from 20 to 19 but at end of next bar adx went up from 19 to 21.5 but -dmi has shrunk from -25 to -23 while +dmi from 15 to 13. with the -dmi value declining from -25 to -23, is it still a valid short trade to take? tks
  • #103
  • Apr 9, 2009 3:24am Apr 9, 2009 3:24am
Quoting sholmes9000
hi acartwright, yes your usdcad attachment reflects the similar situation which i encountered. i did take the trade but it a an emotional ride as price came just 2 pips off my stop before recovering to enable me to take a modest 30 pips profit. was trading euro.

also would like your advice say if there's a bearish crossover, +dmi is 15, -dmi is 25 but adx declined say from 20 to 19 but at end of next bar adx went up from 19 to 21.5 but -dmi has shrunk from -25 to -23 while +dmi from 15 to 13. with the -dmi value declining from -25 to -23, is...
I would always wait until I got a +DMI reading over 20 for long and -DMI reading over 20 for short.

When DMI is below 20 the price action is often choppy.

Also when DMI goes above and then below 20 you should be tightening stops.
  • #104
  • Apr 9, 2009 3:44am Apr 9, 2009 3:44am
Quoting ACartwright
I would always wait until I got a +DMI reading over 20 for long and -DMI reading over 20 for short.

When DMI is below 20 the price action is often choppy.

Also when DMI goes above and then below 20 you should be tightening stops.
ok, so as long as +dmi or -dmi stays above 20, we can still take trade even if +dmi/-dmi values have decreased from prev bar. tks
  • #105
  • Apr 9, 2009 3:54am Apr 9, 2009 3:54am
Quoting sholmes9000
ok, so as long as +dmi or -dmi stays above 20, we can still take trade even if +dmi/-dmi values have decreased from prev bar. tks
When you get a decrease in DMI it simply means that the current bar failed to make a higher highs or lower lows. OR it has made a higher high or a lower low but not in proportion with the last candles low/high.

Hope that makes sense.

Sometimes the changes in DMI reflect swing highs and swing lows.

Clear as mud?
  • #106
  • Apr 9, 2009 4:13am Apr 9, 2009 4:13am
Quoting ACartwright
When you get a decrease in DMI it simply means that the current bar failed to make a higher highs or lower lows. OR it has made a higher high or a lower low but not in proportion with the last candles low/high.

Hope that makes sense.

Sometimes the changes in DMI reflect swing highs and swing lows.

Clear as mud?
yes understood. but tks once again for your clarifications.
anyway, was watching euro 1h chart & saw the bullish crossover with indicating bar's +dmi>20 & its adx increased to 21 from 18. was wondering if i am right to enter long here? tks.
1.3315 entry & after that, it made low at 1.3277....still awaiting trade to develop.
  • #107
  • Apr 9, 2009 4:37am Apr 9, 2009 4:37am
me too... get caught at BUY 1.3315.... EUR/USD 1H
  • #108
  • Apr 9, 2009 5:50am Apr 9, 2009 5:50am
Quoting sholmes9000
yes understood. but tks once again for your clarifications.
anyway, was watching euro 1h chart & saw the bullish crossover with indicating bar's +dmi>20 & its adx increased to 21 from 18. was wondering if i am right to enter long here? tks.
1.3315 entry & after that, it made low at 1.3277....still awaiting trade to develop.
I have just looked at the trade you have taken and it is a valid trade based on the criteria.

I mentioned in the early posts that you have to be careful with the signal candles.

This includes the actual size of the candle.

The indicating candle in this instance had a range of 62 pips - which is quite large for an hourly eur/usd bar.

With such large bars it is likely that there is a retracement.

In this case there was a pull back but your original stop should not have been hit until you were at least 20 pips in profit.

At this point with this type of trade it may have been best to move to breakeven as the trend had temporarily ceased as per the "rounding off" of the macd and the +DMI falling back to the 20 area.

On the flip side - the stop loss has not yet been hit - the lows have become static at 13275 - it might be best to keep the original stop loss in place.

Hope that helps.
  • #109
  • Apr 9, 2009 6:44am Apr 9, 2009 6:44am
On the flip side - the stop loss has not yet been hit - the lows have become static at 13275 - it might be best to keep the original stop loss in place.

Hope that helps.[/quote]

ok noted on that. did notice the signaling bar was exceptionally long. tks very much again.
  • #110
  • Edited 7:42am Apr 14, 2009 7:40am | Edited 7:42am
I entered a Live trade using your strategy.

According to the closed candle indicated by the 2 vertical red bars, this was the indicating candle

As the ADX was above 20, +DI>-DI and +DI>20 and ADX was rising since last candle

Also the MACD confrimed the trade.. the trade was then entered at 148.753
The Stop Loss was set at the low of the indicating candle + Spread at 148.401

I was meant to set it to BE when it had reached +40 pips but it had never reached that. It had since hit the Stop Loss

I just wanted to check that these are the correct parameters and this was just one of those losing trades. OR I should have set a larger stop loss due to the volatility of this pair.

P.S. I had a winning trade this morning with USD/CAD at +28 pips

This trade was a -36pip Trade

So far Live Balance Strategy is at -8 pip trade

Any suggestions on how of avoided this trade to being a losing trade if possible.

P.S.

I use the THV System Indicator by CobraForex to assist me on entering the trade within the hour for fine tuning entry trades by scaling down to 5M or even 1M charts.
That is what the bottom indicator is on chart
Attached Image (click to enlarge)
Click to Enlarge Name: GBPJPY-DI+-TRADE.gif Size: 60 KB
_______________ Say Good-bye to Buy-and-Hold
  • #111
  • Apr 14, 2009 8:55am Apr 14, 2009 8:55am
Quoting deltaworld
I entered a Live trade using your strategy.

According to the closed candle indicated by the 2 vertical red bars, this was the indicating candle

As the ADX was above 20, +DI>-DI and +DI>20 and ADX was rising since last candle

Also the MACD confrimed the trade.. the trade was then entered at 148.753
The Stop Loss was set at the low of the indicating candle + Spread at 148.401

I was meant to set it to BE when it had reached +40 pips but it had never reached that. It had since hit the Stop Loss

I just wanted to check that these are the correct...
Hi Deltaworld,

The gbp/jpy trade that you took was not a valid trade as far as the system goes.

I am able to see why you took it and I did not however.

The settings on your MACD are not the default 12,26,9.

If you had used these parameters you may have stayed out of the trade completely.

And all in all could be up 28 pips from your other trade .

Hope that helps.
  • #112
  • Edited 12:41pm Apr 14, 2009 12:31pm | Edited 12:41pm
Quoting ACartwright
Hi Deltaworld,

The gbp/jpy trade that you took was not a valid trade as far as the system goes.

I am able to see why you took it and I did not however.

The settings on your MACD are not the default 12,26,9.

If you had used these parameters you may have stayed out of the trade completely.

And all in all could be up 28 pips from your other trade .

Hope that helps.
Hi ACartWright

Yes I can see now that my settings for the MACD were not the default ones. I don't know why they were set at the previous settings. I guess I didnt change them when I installed the custom colour indicator.

I have now changed them.

I have also entered EUR/JPY trade at 131.504 SHORT according to this strategy. I have also set SL. to BE when it hit +40 pips.

For more volatile pairs (cross Yen pairs especially) do you still set BE at +40 pips?

P.S.: Potential Trade Entry for EUR/AUD Long to strategy rules over the next 1-2 hours
_______________ Say Good-bye to Buy-and-Hold
  • #113
  • Apr 14, 2009 12:45pm Apr 14, 2009 12:45pm
Quoting deltaworld
Hi ACartWright

Yes I can see now that my settings for the MACD were not the default ones. I don't know why they were set at the previous settings. I guess I didnt change them when I installed the custom colour indicator.

I have now changed them.

I have also entered EUR/JPY trade at 131.504 SHORT according to this strategy. I have also set SL. to BE when it hit +40 pips.

For more volatile pairs (cross Yen pairs especially) do you still set BE at +40 pips?
Hi Delta,

Moving to b/e after 40 pips is normally a good move on the more volatile pairs - not necessarily the yen pairs as usd/jpy an chf/jpy do not move as much as pound/yen eur/yen etc.

I also sometimes take profit after 40 pips if price has hit s/r for example or it looks like the trade wil lturn back.

I have also exited after 40 pips if I am down for the day if it brings me to break even for the day.

So all in all there are a lot of factors involved.

What I like about these two indicators is that they based on different inputs.

MACD is based on closing prices and DMI is the high/lows and net directional movement.

Also in regard to your eur/yen trade you have to be careful of large candles that become signal candles - pound/yen eur/yen I would not enter on a cnadle that showed a signal if its range was say over 100 pips.

You could be putting your self in a compromised position resulting in a pull back.

Hope that the above helps.
  • #114
  • Apr 14, 2009 1:02pm Apr 14, 2009 1:02pm
Quoting ACartwright
Hi Deltaworld,

The gbp/jpy trade that you took was not a valid trade as far as the system goes.

I am able to see why you took it and I did not however.

The settings on your MACD are not the default 12,26,9.

If you had used these parameters you may have stayed out of the trade completely.

And all in all could be up 28 pips from your other trade .

Hope that helps.
Hi ACartWright

I have posted the chart for the BE trade for Eur/JPY

1. There was a big candle that was validated by the strategy
2. Entry SHORT at 131.508 at close of indicating Candle
3. Stop Loss Initially set to High + Spread of Indicating Candle
4. The Price moves to 131.045 setting the trade to +42.3 Pip
5. The SL is now moved to BE
6. Price Action moves and bounces back up to BE and the trade is closed at 0pips

P.S. I have since monitored the pair since posting the chart and the price is now 131.218 and would have been +25pips had the SL not moved to BE.

Any suggestions on how to manage the movement of the Stop Loss from its initial point to BE on this trade or other similar trades?
Attached Image (click to enlarge)
Click to Enlarge Name: EURJPY.gif Size: 65 KB
_______________ Say Good-bye to Buy-and-Hold
  • #115
  • Apr 14, 2009 1:10pm Apr 14, 2009 1:10pm
Quoting ACartwright
Hi Delta,

Moving to b/e after 40 pips is normally a good move on the more volatile pairs - not necessarily the yen pairs as usd/jpy an chf/jpy do not move as much as pound/yen eur/yen etc.

I also sometimes take profit after 40 pips if price has hit s/r for example or it looks like the trade wil lturn back.

I have also exited after 40 pips if I am down for the day if it brings me to break even for the day.

So all in all there are a lot of factors involved.

What I like about these two indicators is that they based on different...
Hi ACartwright

I have noticed you have answered a lot of my queries from the last post that I had posted. Thank you very much.

I have another question in regards to moving the stop loss to BE. Is that normally done during the hour of the +40 pip trade or is that done at the end of the forming candle.

e.g.

Enter trade at 17:00
at 17:25 +40 pips
18:00 now at +25 pips SL not moved
19:00 now at +54 pips SL moved to BE

OR

Enter trade at 17:00
at 17:25 +40 pips SL moved to BE
18:00 now at +25 pips
19:00 now at +54 pips
_______________ Say Good-bye to Buy-and-Hold
  • #116
  • Apr 14, 2009 3:04pm Apr 14, 2009 3:04pm
a Valid Entry trade for NZD/USD

Entered at Open of 19:00 GMT AT 0.58352
_______________ Say Good-bye to Buy-and-Hold
  • #117
  • Apr 14, 2009 4:32pm Apr 14, 2009 4:32pm
Quoting deltaworld
Hi ACartwright

I have noticed you have answered a lot of my queries from the last post that I had posted. Thank you very much.

I have another question in regards to moving the stop loss to BE. Is that normally done during the hour of the +40 pip trade or is that done at the end of the forming candle.

e.g.

Enter trade at 17:00
at 17:25 +40 pips
18:00 now at +25 pips SL not moved
19:00 now at +54 pips SL moved to BE

OR

Enter trade at 17:00
at 17:25 +40 pips SL moved to BE
18:00 now at +25 pips
19:00 now at +54 pips
Hi Delta,

I would go to break even when ever the price gets to its target mid bar.
  • #118
  • Apr 14, 2009 4:42pm Apr 14, 2009 4:42pm
Quoting deltaworld
Hi ACartWright

I have posted the chart for the BE trade for Eur/JPY

1. There was a big candle that was validated by the strategy
2. Entry SHORT at 131.508 at close of indicating Candle
3. Stop Loss Initially set to High + Spread of Indicating Candle
4. The Price moves to 131.045 setting the trade to +42.3 Pip
5. The SL is now moved to BE
6. Price Action moves and bounces back up to BE and the trade is closed at 0pips

P.S. I have since monitored the pair since posting the chart and the price is now 131.218 and would have been +25pips had the...
Hi Delta,

It is a tricky thing to move stop losses to break even at the correct time.

I think it is best to look at the indicators overall and when the price gets to break even.

I.E if it gets to break even at the end of the candle you can look at what the indicators are suggesting.

If it is at the beginning you may want to lock in straightaway and hope for a continued move.

The exit is always the problem as you will never know how far price will go.

In an ideal world I would close 50% of the trade off when a s/r target is made and then move to b/e on the rest.

Unfortunately I am in the process of building my account so I take profit as and when.

Sorry to be so vague.

I have attached a chart to try and explain.
Attached Image (click to enlarge)
Click to Enlarge Name: eur-jpy - 1h 14.04.2009.gif Size: 50 KB
  • #119
  • Apr 14, 2009 4:44pm Apr 14, 2009 4:44pm
Quoting deltaworld
a Valid Entry trade for NZD/USD

Entered at Open of 19:00 GMT AT 0.58352
I would take profit at 0.5813 where the suppor thas been on the 10th April
  • #120
  • Edited 4:24am Apr 15, 2009 3:58am | Edited 4:24am
Quoting ACartwright
I would take profit at 0.5813 where the suppor thas been on the 10th April
I left it running overnight with a trailing stop loss and I exited the trade this morning at .57865

I entered another trade this morning but I got caught out again by the GBP/JPY, I might stay clear of this pair (too volatile for me)

One thing that I had noted.. Is I have added another indicator (I know the idea of this thread is to keep things simple and not overcomplicate with too many indicators).

But I noticed the RSI was oversold (after I had entered the trade. so.. In future it might be a good idea to avoid trades where the RSI is at overbought/oversold point.

I have attached the THV RSI indicator

I am eyeing entry on the hour for GBP/CHF. It meets all the criteria for a valid trade to the strategy rules
edit: According to the last Indicator posted. THV RSI v2.ex4 This pair looks overbought. I have decided not to enter the trade.
Edit: I have SHORT EUR/GBP 0.88695
Attached File(s)
File Type: ex4 THV RSI_v2.ex4   11 KB | 303 downloads
_______________ Say Good-bye to Buy-and-Hold
0 traders viewing now