http://toshi52583.blogspot.com/2010/02/mt4s-adx-and-technique.html
11 February 2010
MT4's ADX and a strategy
Just in case, I'll say “Long time no see.”Do you know that MT4's default ADX is different from Wilder's original ADX? I wonder if it's notorious.
(In my previous post, “Measuring trendiness 1 - finding out what ADX is,” I used MT4's ADX.)
I'll show you the difference using MT4's ADX(14), MT4's ADX(28), Wilder's ADX(14) and Wilder's ADX(7). The first photo is about it. Which one do you like? I don't like all of them, though.
Anyway, I think you'll notice that Wilder's ADX(14) is comparable to MT4's ADX(28) and Wilder's ADX(7) is comparable to MT4's ADX(14).
So, I think you can use whichever you like.
By the way, I'll show you a strategy that uses Wilder's ADX and Bollinger bands. I've seen this strategy at a Japanese fund manager's seminars. I don't use the strategy, though. But I really like his personality.
1 hour chat
Bollinger bands : 21 period / 1 standard deviation
ADX : 14 period (Actually, you don't necessarily have to use it.)
The second photo depicts the strategy.
The entry points are just beyond Bollinger bands' 1 standard deviation. And steep 21 period SMA's gradients are better. You have to avoid flat SMA's gradients' situations. And rising ADX's areas are better but he said you don't necessarily have to use ADX. Fortunately or unfortunately, Bollinger bands are central player.
Do you notice I uploaded mq4's files at my previous posts? This time, I'll upload Wilder's original ADX's mq4's file.
