OPEN-SOURCE SCRIPT
Updated Weekly Positive Directional Movement Index [Coff3eG]
The Weekly Positive Directional Movement Index (WPDMI) is a technical indicator designed to measure the strength of upward price movements on a weekly basis, specifically tailored for analyzing Bitcoin (BTC). This indicator is based on the Positive Directional Movement Index (DMI) concept developed by J. Welles Wilder, with adjustments to suit weekly data and the unique characteristics of Bitcoin.
Key Components and Functionality:
1. Timeframe Adjustment: The indicator adapts to different timeframes by calculating a divisor that converts various timeframes into a weekly equivalent. This ensures consistent calculations across different chart intervals.
2. Directional Movement Calculation:
3. Positive Directional Movement Index (WPDMI): The +DM values are smoothed using a moving average and normalized by the True Range to produce a percentage value that represents the strength of positive price movements.
4. Trigger Levels: Users can set custom top and bottom trigger levels to identify significant bullish or bearish conditions. These levels are highlighted on the chart with customizable colors for easy visual analysis.
5. Background Highlights:
Usage:
Customization Options:
Example Plot:
The WPDMI provides a clear and visual representation of the market's bullish momentum, making it a powerful addition to any technical analysis toolkit.
Key Components and Functionality:
1. Timeframe Adjustment: The indicator adapts to different timeframes by calculating a divisor that converts various timeframes into a weekly equivalent. This ensures consistent calculations across different chart intervals.
2. Directional Movement Calculation:
- Plus Directional Movement (+DM): Measures the positive price movement by comparing the current high with the previous high. If this value is greater than the corresponding negative movement and is positive, it is used in further calculations.
- Candle Range: Utilizes the True Range concept to calculate the range of price movement within a week, taking into account the maximum high-low difference and comparing it to previous close prices.
3. Positive Directional Movement Index (WPDMI): The +DM values are smoothed using a moving average and normalized by the True Range to produce a percentage value that represents the strength of positive price movements.
4. Trigger Levels: Users can set custom top and bottom trigger levels to identify significant bullish or bearish conditions. These levels are highlighted on the chart with customizable colors for easy visual analysis.
5. Background Highlights:
- Above Top Trigger: When the WPDMI value exceeds the top trigger level, the background color is highlighted in maroon to indicate strong bullish conditions.
- Below Bottom Trigger: When the WPDMI value falls below the bottom trigger level, the background color is highlighted in green to indicate potential bearish conditions.
Usage:
- The WPDMI is a valuable tool for traders and analysts who want to gauge the strength of upward price movements on a weekly basis. It helps in identifying potential bullish trends and can be used in conjunction with other technical indicators to make informed trading decisions. By setting custom trigger levels, users can tailor the indicator to their specific trading strategies and preferences.
Customization Options:
- Bottom Line Value: The threshold for the bottom trigger level.
- Top Line Value: The threshold for the top trigger level.
- Line Colors: Customizable colors for top and bottom trigger lines.
Example Plot:
- WPDMI Value: Plotted as a line with adjustable color and thickness.
- Top and Bottom Triggers: Plotted as lines at the specified threshold values, with customizable colors.
- Background Highlights: Visual cues for strong bullish or bearish conditions based on the WPDMI value.
The WPDMI provides a clear and visual representation of the market's bullish momentum, making it a powerful addition to any technical analysis toolkit.
Release Notes
>..<Release Notes
tooltipsOpen-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.