[dpaterso]

Hi,

RT System trades:

I compile that Excel table every night at this time i.e. 00h00 Delta time. For RT System trades I sort the table by ADX(14) ONLY and then start from the bottom and work my up i.e. from the lowest ADX(14) value to the point where ADX(14) now exceeds 20.00000. Then I sort the table by ADXR(14) AND ADX(14) and start working from the top down for SI System and DMI System entries. In other words for the SI System and DMI System I'm looking for instruments where BOTH ADX(14) AND ADXR(14) are above 20.00000 AT VERY LEAST and of course the higher the better. Sometimes (depending on how tired I am) I will place orders for ALL valid signals and the moment that 6 - 8 of them get executed during the course of the day I cancel the rest. I will NEVER EVER exceed the maximum allowable amount of margin per position i.e. 1.875% of the capital balance at the time of opening the position or placing the order (at 200:1) leverage. SOMETIMES I MAY have 6 - 8 - 10 trades open BUT that's ONLY because of the 'rounding' that I'm able to 'fit in an' extra trade or two and not exceed my maximum allowable margin in use of 15% of the capital balance at the time of opening the position (in other words let's say that I can ONLY use $74 (1.875%) on a single position and when incrementing the number of lots for the order the margin cost gets to $74.03 then I DON'T take that amount of lots i.e. the amount must be EXACTLY EQUAL TO or less NEVER EVER more so in this case I'd place an order for one less lot).

I am not REALLY using the RT System EXACTLY as described in the book but 'loosely'. In other words: I am counting the 'BOS' days but not for two or three weeks back but just for the last 'small trend' up or down (I've always been of the opinion that going as far back in time as the book would have you do has little or no relevance to what happened yesterday or the day before at least not with the forex market). THEN instead of placing limit orders I wait for the price to penetrate either S1, B1, LBOP, or HBOP by a 'fair' margin and the I place stop orders so that IF the price goes back in between the lines the order is executed. I then set my TP as per the system and update it daily if it has not been hit. In my experience of that system (not trading it but following some of the trades through a while ago) I have never seen a 'trend mode' trade actually trend for more than one or two bars on forex and that's what go me to 'thinking'. I suppose if the truth be told I'm sort of using the RT System in much the same way as one would CORRECTLY use Pivot Points. It just seems to WORK a whole lot better for me than Pivot Points EVER did!!! I suppose if I read this post through then yes I am following the RT System closer than I thought. I think the main difference is the fact that I'm not buying or selling IMMEDIATELY as B1 or S1 but rather waiting for the price to penetrate these levels for a bit and THEN place an order so that if the price comes back to me I'm in the trade and if not then I don't have to worry about the 'trend mode' trades or being in a 'reaction mode' trade that is going to start trending and cost me money!!! One other 'trick' I've used this week which has paid off well is to do the same thing with HBOP and LBOP i.e. instead of 'assuming' that because the price has penetrated HBOP or LBOP that a 'trend mode' trade has started I place a stop order at HBOP or LBOP so that if the price comes back to HBOP or LBOP I'm then in the trade. I then buy or sell (close) at S1 or B1 as per the book. I suppose the whole idea is to stay OUT of trades that MAY come back to you and only get into trades once they HAVE come back to you if that statement makes any sense at all!!! Of course having said all of this I'm sure that if you followed the system in the book 'to the letter' it would still work well i.e. it's just the 'trend mode' trades that are concerning to me.

I see what you're saying about the ADX and ADXR values changing. It's up to you I think. I would say that the 'golden rule' would probably be that as long as the values for ADX(14) and / or ADXR(14) do not drop below 20 then stay in the trades EVEN ALTHOUGH there may now be better entries. There is a bit of thought required on this one though let's face it. I mean if you're sitting in a nice profit on a position that you opened when ADX(14) and ADXR(14) were very high and those value are now dropping then why not take the profit and open some newer positions with the higher values??? I have noticed that sometimes in the book there is information that is presented that is contradicted somewhere else but I think the 'trick' is to 'filter out' the contradictions and understand where he was trying to go with all of this. I mean to say that most of the systems in the book are trend following systems BUT the direction and placement of the ADX line is ALL IMPORTANT!!! In other words: you're in a trend mode trade with the SI System and ADX(14) is now at 13.89796 let's say. With a reading that low that position ain't goin' nowhere anymore so what's the point of staying in it and invariably just getting 'chopped up' after that??? See my point???

Concerning Oandas ADX indicator: I cannot comment BUT I'M ALMOST SURE that if there is an ADX indicator on the platform then you're looking at ADX and NOT ADXR. Delta is THE ONLY platform where I have actually seen the ADXR line mentioned (and in the book of course) so I would again say that based on this knowledge you're looking at ADX and NOT ADXR regardless of the shape of the line. And AGAIN: you HAVE the book. If it's possible then DO CHECK the formulae for ANY of the indicators on the platform. If there is a problem I can assure you that it won't be the first trading platform where there has been an error made in the 'coding' of an indicator!!! Sometimes I wonder if the programmers have ever SEEN this book or did they just go find the formulae from another Internet site where the owners have ALSO not seen the book and the errors just get compounded from there!!! As for MT4 I can only tell you that with all the MT4 demos (and one live account) that I've had in the past the ADX indicator IS ADX and ADXR does not appear anywhere. OF COURSE: if you can't look at the code or see the formulae then YOU DO HAVE THE BOOK!!! In other words: calculate ADX / ADXR MANUALLY with Excel and compare your values to the indicator in front of you. That's a 'sure fire' test I'd say!!!