Stocks & Commodities V. 31:1 (8): Letters To S&C by Technical Analysis Inc.

ADX & DMI

Editor,

I have a question for the author of “Identify The Start Of A Trend With DMI” from your November 2012 issue.

Having just recreated the worksheet shown in the article’s sidebar beginning on page 18 of the November 2012 issue, I am not clear on which columns are to be graphed. Please help with this.

As for the author’s technique, it looks quite interesting. Has the author explored using this technique intraday?

Thanks, and my apologies for my lack of understanding.

Dan Cash

Author BC Low replies:

I’m not sure what software you are using, but I use MetaStock, and I simply add the ADX, +DI, and -DI lines into three windows, and you are ready to read the signals.

I do not have software that can create the three lines intraday. As such, my techniques tend to apply to end-of-day charts. In general, intraday signals are trickier, I feel.

Editor replies:

The sidebar on ADX merely shows how to calculate the ADX. It does not reflect or implement the system discussed by Low in his article.

For an example of how to implement BC Low’s technique in Microsoft Excel spreadsheet software, please refer to the Traders’ Tips section of our November 2012 issue and see Ron McAllister’s contribution on page 77 of that issue. This is also available in the Traders’ Tips area of our website at http://www.traders.com/ index.php/sac-magazine/departments/ traders-tips/1830-microsoft-excelnovember- 2012 (or click on the Traders’ Tips link from our homepage at Traders. com and scroll down to the “Microsoft Excel: November 2012” item, or type “November 2012” in the title filter search box in the Traders’ Tips area).