"In fact as soon as I see a system developer speaking at a seminar about filtering with the ADX indicator, I start to wonder if this guy really knows what he is doing"
This is from "Trading Systems that work" , Thomas Stridsman.
1) "When comparing Figures 2.12 and 2.13, it is interesting to note that inclusion
of ADX resulted in inferior system performance. Although it is impossible
to draw conclusions from a single example, I offer it to readers
here as a caution flag. Just because data vendors or indicator developers
link two studies together does not necessarily mean their combination will
increase profitability."
Richard Weissaman: Mechanical Trading systems.
"Bollinger Bands with ADX Filter
Although I am certain that there are instances in which ADX improves the
performance of trend-following systems, in general I have found greater
success with this indicator as a filter for mean reversion systems. Here we
take the mean reversion Bollinger band system previously used and replace
the 200-day moving average filter with ADX. This removes the directional or
trend-following bias and replaces it with a filter that is intended to ensure a
nontrending market condition."
Richward weissman Mechanical trading systems
Note: Test your systems before u use them :)
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2 comments:
raja, how to get in touch with u in real time. pl keep the communication channels open. there is no response on ur yahoo msnger
who are you kb bhai?
full name?
yahoo is acting up these days will need a messenger replacement soon
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