Trading the Dow Jones emini resulted in a profit of forty-one points using the TradersHelpDesk ADX and ATR entry methods. As I mentioned in an earlier post, the Average True Range stop acts as a support or resistance for price. Then we simply confirm if there is volume divergence before entering. As you can see on the chart above, the Directional Volume indicator shows a volume momentum shift on entry. When the Directional Volume indicator shows the momentum shift at areas of support or resistance, these are extremely powerful entry bars. The ADX indicator simply confirms what the 45 minute chart was showing — a downward move back to the 3 minute ATR should occur. This allows us to predict where price is going.
Trading the Dow Jones emini with the ADX and ATR for Entries
The 45 minute chart showed that price was at the Average True Range stop (plus sign), which is incorporated into the TradersHelpDesk Trend ATR indicator for NinjaTrader, Multicharts and TradeStation. Plus the 3 minute ADX indicator showed that an ADX magenta peak had formed, indicating a retracement back to the Average True Range stop on the 3 minute, as well.
In other words, there was a confirmation of market direction between the two timeframes, both indicating a downward movement in price should occur. I entered anticipating price to go to the ATR on the 3 minute chart and it did. The entries are shown below on the chart, as well as the exits.
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