About 6months ago I came across the use of TDI in "E.A.S.Y. Method" that I found in forexfactory forums: http://www.forexfactory.com/attachment.php?attachmentid=686629&d=1303831008
and I was able to set up a chart based on the specifications by using Kurbelklaus scripts. However, I found that the alerts were being generated one or two bars too late, so at that time I was not successful using it with Binary Options. A few months later I found a variation of the method in the forecfactory forums which is able to generate the alerts a bit earlier, so this indicator is a modification of that early detection version.
The indicator can optionally use Heikin Ashi candles only for all it's calculation. I would recommend viewing the chart with Heikin Ashi candles, these smooth out the trends and makes trends very clear.
I found that this method it works good with most currency pairs or and with 5min+ timeframe charts. I would suggest expiry of 2 to 6 candles.
The TDI (Traders Dynamic Index)
Band VB (34), color: Blue, buffer: UpZone, DnZone
PRICE LINE (2), color: Green, buffer: mab
TRADE SIGNAL LINE (7), color: Red, buffer: mbb
MARKET BASE LINE MID VB (34), color: Orange, buffer: mid
RSI_OversoldLevel : 22 (normally: 32)
RSI_OverboughtLevel : 78 (normally: 68)
Strong Buy : yellow
Medium Buy : aqua
Weak Buy : blue
Strong Sell : fuchsia
Medium Sell : purple
Weak Sell : black
Hints on How to use:
- When a Medium or Strong alert is generated and histogram colour matches the direction
of the alert (optional auto filter), then place trade in direction of alert candle and .
- I use the multi-Hull MA's for overall trend direction confirmation.
- Best positions normally occur near the (5,15,1) Histogram crossing the zero line.
- The optional coloured Dots along the bottom of the indicator represent the first alert
of this type that was generated in this sequence.
- It is advisable to trade in the direction of the main trend as indicated the HULL MA red cloud:
if red cloud underneath PAC then , if red cloud above PAC then .
- Selecting the HeiKin Ashi candles does affect the and MA caculations, so if you select
normal candles the result chart will change. You can still Optionally select to use Heikin Ashi
- When using the Heikin Ashi candles, a good buy entry is indicated by long top wick and no bottom wick
for bull (green) candles and good sell entry is indicated by long bottom wick and no top wick for
bear (red) candles.
- When the histogram is flat and close to zero line,
this indicates a ranging market, do NOT trade when this occurs.
- When the PAC channel on the main chart is spread apart widely, this is an indication
of extreme and choppy chart, do NOT try to trade during these periods.
A choppy chart is also indicated by Heikin Ashi candles with long wicks on both sides
of the candles.
- You can specify what strength level Alerts are generated (default 2):
Level (1) means only generate Strong Alerts only.
Level (2) means generate Strong and Medium Alerts.
Level (3) means generate Strong, Medium and Weak Alerts.
- Added new alerts for Buy and Sell (Long and Short) signals seperately.
- Upgraded to version 3 Pinescript.
- Added work around patch for opaque bar colouring issue.
- Modified code so when viewing Top chart with Heikin Ashi candles, calculations can still be based on standard candles, unless Heikin Ashi calculation option selected.
- Optimised MACD direction calculation.
HINT: This script generally works well with some Price Action Channel on the main chart, try combining it with my "Price Action Channel Master" or "MA Ribbon" indicators.
- Modified Built-in Alarm alerts so that it only signals occur on the last completed alerted candle. This prevents some false alerts and multiple alerts being generated. When setting alarms I suggest using Frequency "Once per bar (on condition)" to get the earliest signal possible.
- Added optional alternative alert long/short spikes that only occur on the first Long (blue spike) subsequent long signals are ignored until next Short signal cancels it, visa versa for a Short (red spike).
This is the suggested method for setting up Alarms for the Built-in Alerts:
This is the suggested method for setting up Alarms for the Long/Short Spikes: