Introduction to the TDI with Trade Signals and Alert Indicator
The Traders Dynamic Index is a popular technical indicator which can be used as a trading strategy or system by itself. Many traders have also claimed success using these types of indicators.
The TDI with Trade Signals and Alert Indicator is a version of the TDI indicator which adds specific trade signals on the price chart.
What is the TDI with Trade Signals and Alert Indicator?
TDI stands for Traders Dynamic Index. The TDI with Trade Signals and Alert Indicator is a custom technical indicator which is a variation of the popular Traders Dynamic Index Indicator.
This indicator has the basic components of a TDI indicator, which is a Relative Strength Index (RSI) line, a moving average of the RSI, and a Volatility Bands. It also displays the latest trend direction and trade signals on the extreme right of the oscillator window, which is also available with other custom TDI indicators.
What this indicator adds is a different set of trade signals on the price chart itself. It labels a candle “B” to indicate a buy signal, “S” to indicate a sell signal, and “*” symbol to indicate the trade exits.
How the TDI with Trade Signals and Alert Indicator Works?
As with most TDI indicators, this indicator begins with an RSI line. It then applies a moving average line on the RSI, which acts like its signal line. Volatility Bands are then added to the indicator window which is effectively a Bollinger Bands for the RSI.
The trend direction indication on the far right of the indicator window is based on the location of the RSI line in relation to the middle line of the volatility bands. Its corresponding trade signal is based on the crossing over of the crossing over of the RSI line and the signal line.
The buy and sell trade signals on the price chart have a different algorithm which is somehow based on momentum.
How to use the TDI with Trade Signals and Alert Indicator for MT4
This indicator has several options within its settings which allow traders to modify the various components of the indicator. It also has options that toggle the trade signals, as well as the alert notifications, on or off.
This indicator can be used just as with a regular TDI indicator using the crossing over of the various components.
It can also be used based on the “B”, “S”, and “*” trade signals.
Buy Trade Setup
When to Enter?
Open a buy order on the confluence of a “B” buy signal and a bullish momentum breakout. Set the stop loss below the entry candle.
When to Exit?
Close the trade as soon as a “*” signal appears.
Sell Trade Setup
When to Enter?
Open a sell order on the confluence of a “S” sell signal and a bearish momentum breakdown. Set the stop loss above the entry candle.
When to Exit?
Close the trade as soon as a “*” signal appears.
Conclusion
This version of the TDI indicator is very similar to other TDI indicators. Its difference is only with its added trade signals on the price chart. These signals are based on momentum and can produce decent trade setups especially when in confluence with a momentum breakout or breakdown setup.
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