TDI Metatrader Indicator
There are a couple of indicators that seem to come under the TDI initials these days. Trend Detection Index (TDI) has been noted along side the Traders Dynamic Index Metatrader Indicator. So when you are looking for a TDI indicator for your next trading system you need to make sure you find and use the correct TDI indicator.
Traders Dynamic Index indicator, is another one of those so called Russian coded indicators that you hear so much about on the forex forums. But the Trend Detection Index seems to be associated with M. H. Pee. So which one is which?
There is however very little real analytical information on TDI whichever indicator you are talking about.
The Trend Detection Index
Most sites seem to say…”The TDI can be used as a stand-alone indicator or combined with others; it will perform well in detecting the beginning of trends.”
Its a simple two line indicator. The blue line represents the Trend Detection Index while the red line represents the Direction Indicator. For EOD trading the entries would be as follows:-
Enter long tomorrow at the open if both the TDI and direction indicator are positive after today’s close or enter short at the open if the TDI is positive and the direction indicator is negative.
The Traders Dynamic Index
The author provided the trading information for the indicator in the indicator code, which I have replicated below.
Traders Dynamic Index trading rules:-
This hybrid indicator is developed to assist traders in their
ability to decipher and monitor market conditions related to
trend direction, market strength, and market volatility.
Even though comprehensive, the T.D.I. is easy to read and use.
Green line = RSI Price line
Red line = Trade Signal line
Blue lines = Volatility Band
Yellow line = Market Base Line
Trend Direction – Immediate and Overall
Immediate = Green over Red…price action is moving up.
Red over Green…price action is moving down.
Overall = Yellow line trends up and down generally between the
lines 32 & 68. Watch for Yellow line to bounces off
these lines for market reversal. Trade long when
price is above the Yellow line, and trade short when
price is below.
Market Strength & Volatility – Immediate and Overall
Immediate = Green Line – Strong = Steep slope up or down.
Weak = Moderate to Flat slope.
Overall = Blue Lines – When expanding, market is strong and
trending. When constricting, market is weak and
in a range. When the Blue lines are extremely tight
in a narrow range, expect an economic announcement
or other market condition to spike the market.
Scalping – Long = Green over Red, Short = Red over Green
Active – Long = Green over Red & Yellow lines
Short = Red over Green & Yellow lines
Moderate – Long = Green over Red, Yellow, & 50 lines
Short= Red over Green, Green below Yellow & 50 line
Long = Green crosses below Red
Short = Green crosses above Red
* If Green crosses either Blue lines, consider exiting when
when the Green line crosses back over the Blue line.
IMPORTANT: The default settings are well tested and proven.
But, you can change the settings to fit your
Price & Line Type settings:
RSI Price settings
0 = Close price [DEFAULT]
1 = Open price.
2 = High price.
3 = Low price.
4 = Median price, (high+low)/2.
5 = Typical price, (high+low+close)/3.
6 = Weighted close price, (high+low+close+close)/4.
RSI Price Line & Signal Line Type settings
0 = Simple moving average [DEFAULT]
1 = Exponential moving average
2 = Smoothed moving average
3 = Linear weighted moving average
This is a real Renko candlestick indicator that can be used on live forex charts. The indicator draws 2 colored Renko candlesticks: gray and red. Gray candlesticks suggest an uptrend, red candlestick suggest an downtrend. You can combine this indicator with other analysis tools/indicators to build a complete trading strategy or forex system. Trading Signals Buy signal: Look for buy signals at any gray Renko candlestick (up trend) Sell signal: Look for sell signals at any red Renko candlestick (down trend) Indicator Preferences Currency pairs: any Time frames: any Trading sessions: any Configurable Indicator Options Colors, method, filter,… GBP/USD M1 Chart Example
This indicator is called the Momentum Detecting Indicator. It measures the current momentum value, last momentum value and 2nd last momentum value and finally calculates the momentum change (decrease or increase). This indicator works on an currency pair and timeframe. Trading Signals From This Indicator No signals. Configurable Indicator Options Periods, PriceField, MaMethod,… AUD/USD Weekly Chart Example
Parabolic SAR (Stop and Reverse) is an indicator developed by J. Willes Wilder to discover and exploit profitable trends in all kinds of markets. It is a popular tool among technical traders, and a straightforward and as a simple mechanism for analyzing the markets, it offers some unique advantages over other tools. Below we have a chart of the EURUSD pair depicting the Parabolic SAR in action. We observe that the indicator was able to capture many small reversals with remarkable accuracy. And in those cases where it failed, we see that the thrust of the market action was strong enough to place it into a correct configuration, thereby minimizing the potential losses of a faulty trade. Calculation of the Parabolic SAR Parabolic SAR is calculated by a recursive formula which ties the prices of one period to another through simple arithmetics. SAR of Today = SAR of Yesterday + a (EP- SAR of Yesterday) Or SAR of Tomorrow = SAR of Today + a(EP-SAR of Today) EP is the maximum recorded during the time period in consideration. If during each period of analysis a new record is broken, the EP will be updated accordingly, and the SAR value will change. “a” represents the acceleration factor. It is set at 0.02 in the beginning, and reset each time a new EP is achieved. This is to ensure that the indicator’s value will come closer to the EP value every time a new record is broken, but the maximum value for the EP is usually set at 0.2 in order to prevent it from becoming too large and distorting the analytical picture. Due to the higher volatility of the forex market, traders prefer to give an initial value of 0.01 to the acceleration factor on the basis that frequent fluctuations, leaps and bounces in the price action do not justify attaching a lot of significance to arbitrary price highs. Once the SAR value is calculated one of two courses will be taken in order to derive the signal from the indicator. If tomorrow’s SAR remains within today’s or yesterday’s price range, the indicator is set at the lowest price during that time period. For example, if the SAR is slightly above yesterday’s opening lowest price, or close to, but below, yesterday’s high, the indicator will be set at today’s lowest price. If on the other hand, tomorrow’s SAR value is within tomorrow’s price range, the indicator will switch sides. If it is below the price action, it will move to the upside, and if it was on the upside it will come below, signifying a trend switch. Trading with Parabolic SAR Parabolic SAR is generally regarded as a trend indicator, since other types of markets tend to generate false signals leading to whipsaws and fake breakouts. The best way of trading the Parabolic SAR is to first gauge the direction of the market by using simple tools like trend lines, moving averages, or tools like the average true range, before using Parabolic SAR to trade the shorter-term fluctuations that can be exploited within a longer term framework. When it is drawn on a chart, the Parabolic SAR will indicate a bullish market if it remains below the price, or supports it, and when it is above the same it is regarded to be suppressing the prices, indicating bearish conditions. Not only is it possible to regard this phenomenon as a signal for the opening of a position, but it also makes sense to use the Parabolic SAR as a stop or take profit level in each trade. For instance, when the price action is bearish, and we have a sell order, one can choose to exit the position when the price action approaches the SAR level by a predetermined number of pips. When the market action is bullish on the other hand, we can use the Parabolic SAR as a support level, and when the price gets too close to it, we can liquidate the trade. It is also possible to use a time-stop while trading with this indicator. In this case, there is no necessity of a market reversal. Instead we determine a timeframe during which the trade will be kept active, but when that period is out, we’ll liquidate it even if the Parabolic SAR indicator is indicating positive conditions. This course of action is justified on the basis that in a strongly trending market where this indicator is most useful, lack of progress can be a sign of approaching reversal. Conclusion This indicator is most useful in a trending market. It is best to use it in combination with other indicators that establish the general direction of the trend at a higher level, while trading short-term volatility with the SAR. The advantages of this technical tool are its simplicity, clarity of signals, ease of interpretation, and tendency to generate concrete points of action during a trending market. These same strengths are also the weaknesses of the indicator. It is sometimes the case that the solid signals of the SAR indicator lack any practical basis. To avoid such conditions, we suggest that you use the SAR indicator with oscillators that signal emerging divergence/convergence scenarios, so that the common problem of whipsaws are reduced in frequency. Ultimately, of course, our best guide should always be money management and prudence in trading, beyond any single technical indicator