A Cut And Dry Traders Dynamic Index (TDI) Review & Tutorial
Hey Traders 👋
I wanted to do a quick lesson and overview of the Traders Dynamic Index (TDI) Indicator and why it is such a great tool to add to your charts.
First off all I'd like to give credit to the creator of the specific TDI That I use, This is made by @LazyBear and you can find this exact version at the link below, there is also a link to tip the creator if you use this regularly 😜
Indicator link >>
So what is the TDI?
The TDI or the "Traders Dynamic Index" is a trend trading indicator that is based on 3 popular indicators: Bollinger Bands, RSI, and Moving Average. It was created by Dean Malone as a tool to assess over all market conditions as well as generate accurate entry and exit signals.
You can see the TDI added above in two windows (the original colors and my color preference) and each consists of five lines: two RSI lines and three Bollinger Bands. The green RSI line is called fast, the red one is signal - it is calculated based on a longer averaging period. The RSI lines show the strength and volatility of the market. When they cross, they give short-term TDI signals.
Two of the Bollinger Bands are blue, they constitute a trading channel; the yellow line is called the middle, or main, line. The central axis of the indicator is level 50; levels 32 and 68 are also marked. The area above 68 is the overbought zone and the area below 32 is the oversold zone, as in the classical RSI.
Levels 68 and 32 help to define market reversals. If the yellow line crosses level 32 downwards, a local low forms in the market. A subsequent breakaway of level 32 upwards signals a reversal or the beginning of an ascending correction. If the yellow line rises above 68, a local high forms in the market. A breakaway of this level downwards signals a reversal or the beginning of a descending correction.
In my own personal experience I have found that adding a stationary horizantal line at level 50 (marked in aqua on "my colors") will help with finding how far out of balance the market is as it will always try to find equilibrium at the stationary 50 and "liquid" 50 (the yellow line)
Short Term Entry And Exits
The crossing of the green and red lines gives signals for short-term trading. They cross all the time, so its best to take only those in the oversold and overbought areas or add in another indicator to add extra confirmation of entry and exit.
If the fast green line crosses the signal red line from below, it is a signal to buy; if vice versa, it crosses the red line from above, this is a signal to sell.
It would be recommended to take profit when the green line touches the bollinger band across the pane in the same direction of the buy or sell as the most early point, or close all positions when the red and green cross back over (this is best shown in my chart above)
Long Term Entry And Exits And Overall Market Analysis
The crossing of the red and yellow lines gives a more trustworthy long-term signal.
When the signal red line crosses the yellow one from below, it means the bulls are ready to attack and signals to buy. And vice versa: if the red line crosses the yellow one from above, it means the market is bearish and signals to sell.
The crossing of levels 32, 50, 68 by the yellow line
Another trading signal emerges when the yellow indicator line crosses levels 32, 50, or 68. This is a rarer long-term trading signal, especially if it appears on longer timeframes.
The central axis of the TDI is level 50. If the yellow line crosses it from below, this is a signal to buy; if it crosses the level from above, this is a signal to sell.
This concludes my review of the Traders Dynamic Index (TDI)
I hope you found this useful! Subscribe, Like, And Drop A Comment If You Did!
I wanted to do a quick lesson and overview of the Traders Dynamic Index (TDI) Indicator and why it is such a great tool to add to your charts.
First off all I'd like to give credit to the creator of the specific TDI That I use, This is made by @LazyBear and you can find this exact version at the link below, there is also a link to tip the creator if you use this regularly 😜
Indicator link >>
So what is the TDI?
The TDI or the "Traders Dynamic Index" is a trend trading indicator that is based on 3 popular indicators: Bollinger Bands, RSI, and Moving Average. It was created by Dean Malone as a tool to assess over all market conditions as well as generate accurate entry and exit signals.
You can see the TDI added above in two windows (the original colors and my color preference) and each consists of five lines: two RSI lines and three Bollinger Bands. The green RSI line is called fast, the red one is signal - it is calculated based on a longer averaging period. The RSI lines show the strength and volatility of the market. When they cross, they give short-term TDI signals.
Two of the Bollinger Bands are blue, they constitute a trading channel; the yellow line is called the middle, or main, line. The central axis of the indicator is level 50; levels 32 and 68 are also marked. The area above 68 is the overbought zone and the area below 32 is the oversold zone, as in the classical RSI.
Levels 68 and 32 help to define market reversals. If the yellow line crosses level 32 downwards, a local low forms in the market. A subsequent breakaway of level 32 upwards signals a reversal or the beginning of an ascending correction. If the yellow line rises above 68, a local high forms in the market. A breakaway of this level downwards signals a reversal or the beginning of a descending correction.
In my own personal experience I have found that adding a stationary horizantal line at level 50 (marked in aqua on "my colors") will help with finding how far out of balance the market is as it will always try to find equilibrium at the stationary 50 and "liquid" 50 (the yellow line)
Short Term Entry And Exits
The crossing of the green and red lines gives signals for short-term trading. They cross all the time, so its best to take only those in the oversold and overbought areas or add in another indicator to add extra confirmation of entry and exit.
If the fast green line crosses the signal red line from below, it is a signal to buy; if vice versa, it crosses the red line from above, this is a signal to sell.
It would be recommended to take profit when the green line touches the bollinger band across the pane in the same direction of the buy or sell as the most early point, or close all positions when the red and green cross back over (this is best shown in my chart above)
Long Term Entry And Exits And Overall Market Analysis
The crossing of the red and yellow lines gives a more trustworthy long-term signal.
When the signal red line crosses the yellow one from below, it means the bulls are ready to attack and signals to buy. And vice versa: if the red line crosses the yellow one from above, it means the market is bearish and signals to sell.
The crossing of levels 32, 50, 68 by the yellow line
Another trading signal emerges when the yellow indicator line crosses levels 32, 50, or 68. This is a rarer long-term trading signal, especially if it appears on longer timeframes.
The central axis of the TDI is level 50. If the yellow line crosses it from below, this is a signal to buy; if it crosses the level from above, this is a signal to sell.
This concludes my review of the Traders Dynamic Index (TDI)
I hope you found this useful! Subscribe, Like, And Drop A Comment If You Did!