Smooth, low-lag, bipolar version of DMI
Less noise + better timing = higher profits
DMX is the ultra-smooth, low lag version
of your classic DMI indicator. With DMX on your charts, you can throw away both
DMI and ADX.
|What Is DMX ?|
The classic indicator ADX is a smoothed (and lagging) version of the more basic, and more noisy, DMI indicator. DMI itself is composed of two jittery components, DMI.up and DMI.down, combined the following way ...
DMI=| DMI.up - DMI.down | / | DMI.up + DMI.down |
Let's create a new signal, called "Bipolar DMI", and let it be the same as the classic DMI formula above, except that the absolute value is NOT applied. This lets the bipolar DMI be both positive (during upward trends) and negative (during downward trends). The new formula is ...
Bipolar DMI=( DMI.up - DMI.down ) / ( DMI.up + DMI.down )
The following chart shows the magenta line as bipolar DMI. It is very noisy (jagged) and needs to be smoothed. However, smoothing this line would add unwanted lag.
Compare the noisy magenta line to the blue line underneath. This new line is Jurik's DMX, the clear replacement for bipolar DMI. DMX offers a clean, jagged-free picture, allowing you to detect true market direction faster, and with greater accuracy.
As for real world data, the chart below shows how DMX might be used to generate trading signals. In this example, trades are generated whenever DMX crosses the zero line.
In this next example, trades are generated when DMX momentum changes direction. This momentum technique would be virtually impossible using classic DMI because of the jagged lines in a DMI chart.
See an example where bars of NASDAQ are colorized in TradeStation using DMX. The graphic also reveals code logic used to decide color.
TradeStation -- MultiCharts
eSignal -- Investor/RT -- NeoTicker -- Trade Navigator -- NinjaTrader -- Market Delta -- Extreme Charts -- Sierra Chart
AmiBroker - Neoticker - NeuroShell - Trading Solutions - Matlab
DLL (for software programmers)
For more details on DMX, download our illustrated PRODUCT GUIDE.
Download our TECHNICAL REPORTS. Lots of charts and comparisons.
Read our CUSTOMER's LETTERS. See what others have to say.
Read our FREQUENTLY ASKED QUESTIONS. For answers to technical issues.
DMX is an
indicator, not a trading system.
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