Directional Flow Signals

Directional Flow Signals is a DMI-based trend direction indicator designed to highlight shifts in directional pressure directly on the price chart.

The indicator uses the Directional Movement Index system, comparing DI+ and DI- to determine which side of the market is currently dominant.

When DI+ is above DI-, candles are colored bullish.
When DI- is above DI+, candles are colored bearish.

A Long signal appears when directional control shifts from bearish to bullish.
A Short signal appears when directional control shifts from bullish to bearish.

This allows traders to quickly visualize changes in directional bias without needing to keep a separate DMI/ADX panel open.

Key features:

- Bullish and bearish candle coloring
- Long and Short signal labels
- DI+ / DI- crossover-based trend shifts
- Built-in alert conditions
- Adjustable DMI length and smoothing
- Custom candle colors

This tool can be useful for identifying directional transitions, trend bias changes, and possible momentum shifts when combined with support/resistance, volume, VWAP, market structure, or higher timeframe confirmation.

Important:
This indicator does not predict price movement and should not be used as a standalone trading system. Since the signals are based on DI+ and DI- crossovers, they may produce false signals during sideways or low-volatility market conditions.

Inputs:

Show BUY/SELL Signals:
Allows users to enable or disable Long and Short labels on the chart.

ADX Length:
Controls the lookback period used for the Directional Movement Index calculation.

ADX Smoothing:
Controls the smoothing applied to the ADX/DMI calculation.

Up Candle Color:
Sets the candle color when DI+ is stronger than DI-.

Down Candle Color:
Sets the candle color when DI- is stronger than DI+.

Directional Flow Signals is a visual trend-bias indicator based on the Directional Movement Index.

The script compares DI+ and DI- to determine whether bullish or bearish directional pressure is dominant. Candles are colored according to the active directional bias, and signal labels are displayed when the dominant side changes.

Signal logic:

Long Signal:
A Long signal is generated when DI+ becomes stronger than DI- after previously being below it.

Short Signal:
A Short signal is generated when DI- becomes stronger than DI+ after previously being below DI+.

The goal of this indicator is not to predict reversals, but to provide a clear visual representation of directional pressure shifts.

It is best used as a confirmation layer together with price structure, volume, VWAP, support/resistance, or higher timeframe trend analysis.

Limitations:

- Signals are based only on DI+ and DI- dominance.
- The ADX value is calculated but not used as a strength filter.
- False signals may occur in ranging or choppy markets.
- The indicator does not provide stop loss, take profit, or risk management levels.
- It should be used as a confirmation or visual bias tool, not as a complete trading system.