Trader’s Dynamic Index (TDI) Explained

What is TDI?

A hybrid indicator developed to indicate market conditions related to trend direction, momentum, and market volatility.

An “all-in-one” indicator representing Market Sentiment!

 

TDI Lines:

  • RSI Price (Green) Line

Green > 50 = Positive sentiment … (Buyers buying)
Green < 50 = Negative sentiment … (Sellers selling)

  • Trade Signal (Red) Line

Rules: Trade Long when Green > Red.
Trade Short when Green < Red.
Exit trade when Green & Red crossover.

  • Market Base (Yellow) Line

Rules: Market Base Line (MBL) is the Overall Trend.
Trade Long when Green is > Yellow line.
Trade Short when Green is < Yellow line.

  • Volatility Band (Blue) Lines:

When expanding, market is strong and trending.
Whereas, when constricting, market is weak and in a range.
When the Blue lines are extremely tight in a narrow range, expect an economic announcement or other market condition to spike the market.
Rules: Possible to add to a Long when Rules: Possible to add to a Long when RSI PL is > VB.
Possible to add to a Short when Possible to add to a Short when RSI PL is < VB.
Consider exit when Consider exit when RSI PL crosses back over crosses back over VB.

 

How Are the Lines Calculated?

RSI (Green Line) is the Relative Strength Index line calculated using the RSI Period. This is available as an in-built indicator in MT4.

Check out the detailed calculation formula here:

https://www.investopedia.com/terms/r/rsi.asp

 

TSL (Red Line): It is the Moving Average of past RSI values.

 

Volatility Bands (Blue):

Top Band = (MA + (1.6185 * StDev(RSI, Volatility Band Period)))
Bottom Band = (MA – (1.6185 * StDev(RSI, Volatility Band Period)))

 

MBL (Yellow Line):

Average of the volatility Bands:
((Upper Band + Lower Band)/2)

 

Check out the TDI Scanner Dashboard:

TDI Scanner Dashboard
 

References:

 

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