brevco 

I have been using the above setup with a multi-colored ADX histogram. With the help of mrLogik, the attached iADX turns magenta when the ADX is above the 50 threshold. (I use a very short setting of 5 for daytrading/scalping.) The parameters for the threshold and colors can be changed in the indicator window. Also attached is the multi-colored ADX line which I super-impose on top of the iADX for a better visual effect (see attached screenshot). Thank you, Big Mike, for a great website!

Try using the DM indicator together with the ADX multicolor. The DM is much more accurate and useful. When you get a crossover of the 2 lines your have a move up or a move down. See attached chart from 6E today

The Adx indicator is really a function of the DM, so that the DM is more reliable and gives the better signal.

When the Blue is above the Red you have a long, and when the Red is above the Blue you have a short

Another thing is that if the ADX is ABOVE BOTH DM lines we are topping out or bottoming out, and usually when the ADX then turns down, we have the top/bottom. When the ADX is BELOW both DM lines we are in a CHOP mode. Watch these little things as they can give a lot of information of the upcoming price action .

Thank you, Perryg:

As a matter of fact, I do use the DM superimposed on top of the ADX histogram with a setting of 5. The lower threshold is 20 and I don't take a trade unless both the DM and the ADX are above 20.

I notice you are using something called a DMplus. Is this version available on a forum? For some reason, the default DM in NT doesn't seem to plot correctly. I also use Amibroker and there is a difference between the Amibroker and NT DM indicator. I like the appearance of your DMplus.

One of the things I watch for is for the DMI below the lower threshold of 20 to be "flat" or smooth....as the ADX moves up, it forms a sideways "v" with the DMI below the lower threshold. This shows me the breakouts from consolidation. (see attached screenshot)

The explanation for trading the magenta histogram can be found at tradershelpdesk.com. She uses this setup (with her own version of the ADX histogram) and calls it a "free money" trade. It is very accurate.

I am used to trading with the DMI lines instead of a DM histogram (as in the website mentioned above), so that is why I've been searching for better, smoother version of the DMI. For now, I am working with the NT default DM.

brevco 

Thank you, Perryg: As a matter of fact, I do use the DM superimposed on top of the ADX histogram with a setting of 5. The lower threshold is 20 and I don't take a trade unless both the DM and the ADX are above 20. I notice you are using something called a DMplus. Is this version available on a forum? For some reason, the default DM in NT doesn't seem to plot correctly. I also use Amibroker and there is a difference between the Amibroker and NT DM indicator. I like the appearance of your DMplus. One of the things I watch for is for the DMI below the lower threshold of 20 to be "flat" or smooth....as the ADX moves up, it forms a sideways "v" with the DMI below the lower threshold. This shows me the breakouts from consolidation. (see attached screenshot) The explanation for trading the magenta histogram can be found at tradershelpdesk.com. She uses this setup (with her own version of the ADX histogram) and calls it a "free money" trade. It is very accurate. I am used to trading with the DMI lines instead of a DM histogram (as in the website mentioned above), so that is why I've been searching for better, smoother version of the DMI. For now, I am working with the NT default DM.

I am attaching the DMPlus_v1 for your use. Hope it helps.

I appreciate it very much. Thank you, Perryg.