Dr Alexander Elder's advice on ADX

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ramaswamyrmm

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Post Number: 3
Registered: 10-2008

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Sunday, November 02, 2008 - 11:56 pm:

In this very site, Dr Alexander Elder has given very valuable tips as to how to handle a trade using the ADX. He ahs also cautioned us to use STOP LOSSES always, does any body have any idea as to how to arrive at a stop loss while using the ADX to trade.

davkell

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Post Number: 570
Registered: 07-2004

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Monday, November 03, 2008 - 07:22 pm:

You've already asked this question, and it's been answered, but with no response from you.

http://forum.incrediblecharts.com/messages/6/1753320.html#POST141544

My original answer to your first question:

You can incorporate your DM system with the SAR (Stop & Reverse) System also from Wilder. It trails the stock and moves closer to the price as the trend extends over time.

You can also utilise set-ups in the DMI to signal a pending change in direction (i.e you then tighten your stops or set them at previous days low, or just get out ASAP!) One such set-up is when the DMI is above the positive and negative lines and turns down (best at a high level). This can signal a pending reversal of direction.

A couple of ideas for you.

Cheers.

"Trade Your Way To Financial Freedom" - Van K Tharp

"Manage the downside; the upside will take care of itself" - Donald Trump

morton

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Post Number: 114
Registered: 05-2005

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Wednesday, November 05, 2008 - 03:59 pm:

If you read Elders new book - Sell, and Sell short, it's all explained. Put a stop at a price far below where the price should go, and use a soft/hard stop depending on your experince.