RE: Assignment Crypto Academy Season 03 - Week 07 | Advanced Course - Trading Crypto with Average Directional Index (ADX) Indicator [@kouba01]
Hello @amar15,
Thank you for participating in the 7th Week Crypto Course in its third season and for your efforts to complete the suggested tasks, you deserve a 6.5/10 rating, according to the following scale:
Originality | Compliance with topic | Consistency of method | Quality of analysis | Clarity of structure & language |
---|---|---|---|---|
My review :
An acceptable work in which the topic was discussed in all its aspects through answers of varying accuracy, some of which lack depth in the analysis, which loses the work's critical dimension in some paragraphs.
ADX= 100 Times of [|(+DI)-(-DI)/(+DI)+(-DI)|/N]
- The final operation is ADX = Sum of n [((DI +) - (DI-)) / ((DI +) + (DI-))] / n, So to get the correct ADX result, you need to calculate DX values for at least n periods then smooth the results.
So you can see if we are using 9 Period then we are getting instant reaction/impact on the ADX value which is really good for Scaling/Day trader.
- The selection of indicator period settings depends on the chosen trading system and the type of trader. A higher indicator period is reliable but takes time to give signals, while a lower indicator period generates a quick indicator crossover and sometimes generates unreliable trend information.
Buy Signal: Whenever DI+ crosses above DI- it generates Buy signal.
Sell Signal: Whenever DI- crosses above DI+ it generates Sell Signal.
This approach is not very relevant, because the DMI is very sensitive and the DI crosses very often. When you observe them on our last graph, you notice that several false signals are generated using this method.
Your answer on how to extract false signals and with ADX indicator was not deep in terms of analysis and illustrative examples.
Thanks again for your effort, and we look forward to reading your next work.
Sincerely,@kouba01