The algorithm script is based on a trend-following strategy and uses a dynamic moving average to identify price reversals and market turning points. The indicator also has the ability to display whether the underlying instrument is in an upward or downward trend.
The Dynamic Force indicator generates signals for when to initiate new positions or determines when an existing trend is about to reverse in order to close positions. The "MA Signal Line" and “Trend Cloud” functions have been implemented to determine the trend direction of the underlying instrument.
The Dynamic Force indicator can be used on all time frames and instrument types.
It is important that you adjust and optimize the indicator settings for the instrument and time frame you are trading. Each financial instrument has its own rhythm and technical trading range, so you need to adjust and fine-tune settings to optimize the trading signals. You can tune and tweak the indicator settings to improve signal generation accuracy. Settings can sometimes be very individual, depending on your trading style and time frame used.
The default settings of the Dynamic Force indicator are optimized for use on all time frames. You may need to adjust the default settings to optimize it for your trading style and instrument type. You can also experiment with the signals and try some custom settings (see below).
Period - this input variable is used in the calculation of the dynamic moving average. A higher value will make the indicator less sensitive to price fluctuations. Try to increase/decrease the Period value a few steps to optimize the signals. We suggest you try settings between 3 to 20. If you want more smoothed signals, increase the Period value >10.
Equalizer 1 – is an adjustment factor used in the calculation of the dynamic moving average equation. The adjustment value can be tweaked to allow the signal output to better follow the underlying price. You can try to tune the setting a bit to improve signal generation - but in most cases you can leave the default setting as it is.
Equalizer 2 – the second adjustment factor is used to increase the accuracy of the signal output. Try to tune the Equalizer 2 a few steps to optimize the signals.
We suggest you also try these custom settings:
hlcc4, 8, -3, -1
close, 8, -3, -1
close, 8, 0, -3
close, 3, 0, -3
close, 10, 2, 4
close, 7, 0, 3
close, 15, 1, 4
close, 5, 0, -2
close, 14, 0, -4
close, 11, 0, 0
close, 5, -4, -3
hlc3, 13, 6, 7
How to use:
1. Use on any instrument and time frame (fine-tune Settings).
2. When ‘Buy’ signal is confirmed (Green triangle, up ▲) –> enter Long position.
3. When ‘Exit’ signal is confirmed (Red triangle, down ▼) –> exit Long position (or go Short).
4. Exit also when -> trade hits your profit target/limit or stop loss (determined by user).
IMPORTANT: Wait for candlestick close to ensure signal is a confirmed signal!
Exactly how the indicator is used varies from trader to trader. When interpreted correctly, a trader can initiate new positions in the direction of the new trend and exit before the trend reverses. It can be used as a scalping tool in shorter time frames, but also as a timing indicator for day trading or swing trading strategies.
By using algorithms and technical indicators, you can increase the probability with your trades - and together with your trading experience, you can create and develop a strategy that can give you an “edge” in the market.
This indicator has been developed to work with regular bar candles, but we also recommend that you use it with Heikin Ashi candles or Line Break bars to filter out as much noise as possible and as these often have an improved ability to capture high-quality trends.
⚠ If you are new to trading and/or technical analysis in general, we always recommend a demo account (“paper-trading”) until you become familiar with how to use the indicator.
Dynamic Force is a non-repainting indicator (meaning that signals do not change or disappear after bar close).
When using the Alert function, we recommend to use the “Once Per Bar Close” configuration and wait for bar close to confirm entry/exit signal.
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