Monday, February 14, 2011

ADX Strategy Update

The ADX portfolio is moving along but I am implementing some changes to the enter/exit strategy due to its current rigidness.

The Enter Strategy

  1. ADX is rising - between 20-27. We will change to 18-25.
  2. +DI is above 20
  3. -DI is below 20
Exit Strategy

  1. After the ADX closes with a 35, you sell the position on the 5th day it closes at 35 consecutively. (If it closes above for 3 days, then dips below for 2, and back up for 2 more up days, you now have to wait 3 more days for the signal to confirm)
  2. A 40% gain closes out the position.
  3. Stock losses 15% closes out position.
  4. DI - crosses above 20 you sell after 5th consecutive day close - we will delete this rule completely.
  5. ADX indicator moves below 20 for a period of 5 days.  We will now change to it to 18.

If we look at JASO and the reasoning for the changes as shown.

With these added changes to the ADX strategy we will now incur more volatility in general but we still have the limit loss in place to protect us from fallout.  So far so good.  Good Luck!!

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