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Tracy Mullen wrote:
> I am looking for an indicator that plots the volatility, does ADX do that?
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ADX is more traditionally thought of as an indicator of trend, but
some use it as an indicator of volatility. An important, but often
overlooked, use of ADX is to help identify periods of non-trend. When
ADX levels are consistently under 18, start looking for chart patterns
(triangles, wedges, flags, channels, etc.). Periods of non-trend
alternate with periods of trend. When you identify a potential chart
pattern breakout during non-trending periods, you know you have a good
chance of catching a trend move in the very beginning stages. This
works in all time frames. I generally trade off 5 minute bars, but
monitor ADX levels and pattern development on 15 minute bars.
Bollinger Bands might be a better indicator for the measurement of
volatility. I prefer using methods as detailed by Larry Connors in
"Investment Secrets of a Hedge Fund Manger" and "Street Smarts". I've
attached a .gif of Sept. Bonds to show how combining this indicator
with Inside Days or Narrow Range Days can lead to explosive market
movements. The last day charted is Friday, June 25. This market looks
like its ready for some early fireworks!
Bob Hunt
E-Mail: RHunt.066@xxxxxxxxxxxxxxxx
Web Site: http://home.att.net/~rhunt.066
Attachment Converted: "c:\eudora\attach\0628_VOL.gif"
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