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I programmed the DMI indicator, and it visually looks
pretty good, and optimized with good results. I think
I used a 5 bar length, with vidya. It fell apart was
was not tradable. This is about the time I discovered
Jurik's adaptive moving average. I'm probably overly
biased because I use Jurik's CFB, JMA, and VEL in all
my systems. I like Jurik's CFB because it is very
good at picking trend turns, and can adaptively be used
as a look back. JMA now has a phase adjustment that
you can use to produce lag or shift forward an
adaptive moving average. You can make a very good MACD
out of this. VEL smooths momentum indicators very well,
and causes them to spike at their peaks, so you don't need
to write adaptive bands around the highs and lows. He also
normalizes it to zero, but I find its better to trade
the peaks (Go long on a negative peak below zero when it
tuns up, and short a positive peak above zero when it
turns down).
I found a better way to use DMI was with a channel.
At a channel bottom, go long when the DMI turns up
off of a negative peak, and go short at the channel
top on a positive peak. I use Stoller Bands done by
Manning Stoller, and use his three touch band technique
which is pretty reliable. Manning gave a presentation on
this at TAG 97, and there is a write up on
in in the TAG 97 conference workbook.
David
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