A trend is defined as.... what?
A continual move in one direction. For how long? How steep? How fast?
You get the point, everyone (well almost) wants to trade with the trend but everyone would probably call the trend differently. The big monster moves are easy to see, at least once they've happened they're easy to see.
That's the trick, we trade the "hard right edge" of the chart. All gurus and system salesmen can point to their perfect entry points on a static chart, but try trading it live.
The point of this post, if there is one, is why do I use so many different, or redundant depending on your view, indicators. Sometimes I wonder myself. I had the CCI programmed into my blue bars for a while and then discovered that every signal I had happened with or without my CCI criteria. In other words, for me, the CCI was a redundant indicator so I got rid of it.
Today was a strange day in crude oil as there was lots of volume and some nice moves but everything seemed to happen in slow motion. The indicator that picked that up the best today was the ADX. The ADX is the one indicator that I have sometimes wondered about, wondered if it was redundant for me.
It also got me wondering what the heck is it. Gasp you say. He doesn't know, I'm getting a new guru!
Well I'm not your guru and I have the definition written down in my plan but as I sit here I can't really remember what it is. J Welles Wilder invented it, along with the ATR and many others. I still haven't looked now, from what I remember it is just an average of Wilder's DMI lines. Hmmm that does beg another question now doesn't it.
Ok I'll look it up, back in a sec.
Read it for yourself. Read some more here.
I pretty much knew all that, still not sure what the DMI lines are, moving averages of some sort I guess.
Anyway the ADX worked well today and either kept me flat or warned me to tighten stops. I say it was the ADX today because the other indicators looked strong at times. ATR wasn't through the roof but was there, the EMAs had good angles, just the ADX said, wait a tic here boss.
I listened and the day was positive. One good trade, one stop, and many break evens.
2 Minute CL Chart