Shanxia

Crypto Directional Movement Index DMI/ADX

Crypto ADX + DMI

This indicator is a customised version of the ADX + DMI by J. Welles Wilder in 1978, with default settings optimal for cryptocurrencies.

What is the DMI ( ADX ) Indicator?

According to Investopedia:

DMI ( ADX ) consists of three indicators that measure a trend’s strength and direction. Three lines compose the Direction Movement Index (DMI): ADX (black line), DI+ (green line), and DI- (red line). The Average Directional Index ( ADX ) line shows the strength of the trend. The higher the ADX value, the stronger the trend. The color of the lines can be altered, but black, green, and red are the default in most software.

The Plus Direction Indicator (DI+) and Minus Direction Indicator (DI-) show the current price direction. When the DI+ is above DI-, the current price momentum is up. When the DI- is above DI+, the current price momentum is down.

This Version

The ADX default value has been changed to from 14 to 2 (optimal for cryptocurrencies). The background flashes red when the –DMI goes above the HZ1 threshold and green when the +DMI does the same. There is an option to change it so that it’ll only flash when the ADX and the DMI are both above the threshold. The ADX changes color when above HZ1.

Red and green plotshapes appear at DMI crossovers and three horizontal lines have also been added.

Any suggestions are most welcome
Release Notes: Updated notes
Release Notes: Added extra color changes.

Both DMIs will change color depending on a positive or negative slope.

Plotshapes are now tiny and added notes in the script on how to change them.

Also changed default background colours.
Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.

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Comments

Very nice indicator, thank you!

Are there any other indicators that you recommend for crypto?

and which settings do you use for Dax, S&P, cfd..?
+2 Reply
elme1234 elme1234
@elme1234, i forgot to ask if this indicator works with heikin ashi also or better with the normal candles?
Reply
Shanxia elme1234
@elme1234, I think it works for all kinds of candles but it is best used for normal candlesticks, as thats what it was designed for by Wilders :)
Reply
Shanxia elme1234
@elme1234, You're welcome mate. Yes, I mainly use this and the rsi and stochs.
This rsi is pretty good

and I use this stochastic

MACD is always good. Other than those, I mostly use custom indicators.

I believe the best settings for traditional is the default settings (14, 14). ADX length on 2 is best for crypto but, I have noticed it works quite well in traditional too.
+1 Reply
Legend
Reply
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