[dpaterso]

Good (Tuesday) morning all!!!

As you can see: I've 'deemed' this a 'very important post'!!!

Something in 'the book' has bee confusing me and concerning me deeply for the past couple of months and I've not quite been able to 'put my finger on it' until now (I think). Read on and tell me if you agree with me!!!

It's regarding the use of ADX and / or ADXR.

The question that's always been at the back of my mind has been: 'WHY is there an ADX AND an ADXR'??? (I KNOW what the difference is betwee the CALCULATIONS themselves BUT WHY TWO indexes)??? What I've been doing up until now is finding instruments or pairs with the highest ADXR value ('highest ADXR value' meaning > 25) AS WELL as an ADX value > 25 to trade using the trend following systems and I've been looking for instruments or pairs with the lowest ADX value ('lowest ADX value' meaning < 25) AS WELL as an ADXR value < 25 to trade using the RTS and TBP.

Now it's been bothering me that, doing it the way I described above, very often I'd get a valid SIS entry signal (for example) BUT would NOT take the trade because EITHER or BOTH the ADX and / or the ADXR had a value of < 25. SO: I AGAIN 'studied' Section IV ('DIRECTIONAL MOVEMENT') and it's sort of 'dawned' on me that EITHER I've been reading things wrong here OR there are certain 'typos' in this section i.e. where references to ADX / ADXR have been 'mixed up'. If this is NOT the case then at very BEST case references to ADX and / or ADXR are sort of 'not in logical order' if that makes ANY sense at all!!!

Let me explain:

Take a look at Page 46 (the paragraph that begins 'In Fig 4.12, the ADX ...'. Note that ADX is being referred to here. Now keep reading. In the very LAST paragraph on Page 46 we all of a sudden have a reference to ADXR!!! Can this be right??? Also: between Pages 47 and 48 there are numerous references to BOTH ADX AND ADXR which APPEAR to be contradictory (or at VERY least by following the text literally you'll be kept out of some good trades). The whole point of what I'm saying is that EVEN IF I'm WRONG about what I'm saying above here then this section is REAL difficult to 'decipher' i.e. WHEN do you use ADX and WHEN do you use ADXR???

THEN:

'Light bulb moment'!!!

Take a look at Page 44 now. Have a read of the paragraph that starts with 'This is all the information we need ...' and MORE IMPORTANTLY the next paragraph that starts with 'These three entities pertain to ...'!!!

Now take a look at Page 40. Have a read of the last paragraph that starts with 'At this point you have probably ...' and pay particular attention to the fact that the words 'ADX Scale' are in bold!!!

Now take a lok at Page 111. Have a read of the paragraph that starts with 'For this reason, the most important index to use ...'.

Now what I've 'got' from ALL of this is the following:

The ADX is used ON IT'S OWN to determine which pairs to trade with which systems IF you're NOT going to use the CSI!!! If you ARE going to use the CSI then it's the ADXR that gets factored in and ADX has nothing at all to do with it!!!

(Important edit:

I now believe the above statement to be inaccurate and incorrect!!! I'm leaving the statement here for continuity however. Please read my later posts for more on the above).

DO YOU AGREE WITH ME???

The point is this:

EITHER references to ADX / ADXR have been 'mixed up' or 'interchanged' erroneously OR because of the constant 'jumping around' between references to them a brain like mine can be SO EASILY be confused!!! I'm not sure whether this qualifies as 'errata' to be posted at the beginning of the thread OR if it's just my brain that can't cope with the 'jumping around' but suffice to say I think I've FINALLY 'got it right' (at least in MY head)!!!