Forex tdi strategy

Subscribe Subsribed 0. The RSI helps find out if "overheated" is the current trade. The Bollinger Bands help to measure the price oscillation amplitude and the trend's course. The TDI may be used as a separate trading method thanks to its sophistication. The green RSI line is called quick, the red line is signal - based on a longer average duration, it is estimated. The RSI lines show the market's power and uncertainty.

USING THE TRADERS DYNAMIC INDEX

They send brief-term TDI signals when they cross. Two of the Bollinger bands are blue, creating a trading channel; the middle, or lead, line is called the yellow line. Level 50 is the central axis of the indicator; levels 32 and 68 are labelled as well. As in the classical RSI, the area above 68 is the overbought zone and the area below 32 is the oversold zone.

Levels 68 and 32 help describe reversals in the market. When a yellow line crosses level 32 downwards, the market forms a narrow local line. A subsequent breakaway upwards from level 32 signifies a reversal or the start of an ascending correction.

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If the yellow line rises past 68, the market forms a local elevation. A breakaway downward from this stage signifies a reversal or the beginning of a downward correction. Installing an indicator and setting it up: Alternatively, in the Navigate pane, left-click the TDI and drag it to your instrument's map. Crossing the lines between green and red: For short-term trading, the crossing of green and red lines gives signals.

If the quick green line crosses the red line signal from below, it is a purchase signal; if, vice versa, it crosses the red line from above, it is a selling signal. At the channel boundaries the blue lines or an inverted crossing of the green and red lines, aim to take advantage. The crossing of the red and yellow lines: the crossing of the red and yellow lines provides a long-term signal which is more trustworthy.

If the red line of the signal crosses the yellow one from below, it means that the bulls are ready to strike and to buy signals. And vice versa: if from above the red line crosses the yellow line, it means that the market is bearish and signals are to be sold. Crossing the yellow line at levels 32, 50, Another trading signal appears as the yellow indicator line reaches the 32, 50, or 68 levels.

This is a less frequent long-term trading signal, especially if it occurs over longer timeframes. The TDI's central axis is at level This is a signal to buy if the yellow line crosses it from below; if it crosses the level from above, it is a signal to sell. It is a warning to sell if the yellow line e[it is the overbought area and crosses level 68 from above.

A signal to buy forms, verified by the crossing of level 32 from below, is provided when the yellow line leaves the oversold field. The trade should have profited for 80 pips, giving it a On the chart below, all possible trades using this strategy was tested to check if the strategy does have an edge. Out of the 11 trades taken, 5 were winners, 4 were losers, and 2 were breakeven with a possible few pips profit.

Even though the win rate ratio is not that high, however, because the winning trades were gaining big, and the loosing trades were losing small, the trader should still have ended the period with a profit. This means that this strategy has an edge. Sell Entry: To enter the trade, the RSI line represented by the green line should be crossing below the moving average line represented by the red line. Stop Loss: The stop loss should be a few pips above the most recent minor swing low.

This trade setup should have gained 71 pips while risking only 8 pips on the stop loss. That would have been a risk reward ratio of To test the strategy, all the possible trades were tested on this chart. Out of the 12 trades taken, 8 were winners, 3 were losers, and one was at breakeven.

Again, the average pips gained on the winners were higher than the average pips lost on the losers. This gives the strategy a trading edge.

This strategy is not perfect. It still gets some losing trades. This is because the strict rules of the TDI indicator strategy is loosened up to get more trades.

However, even with the easier rules, the trade still had a winning percentage. The cherry on top is that the average pips gained on winners is higher than the average pips lost on the losers. This gives the strategy a slight trading edge. If you would rather have a high winning percentage rather than more trades, what you could do though is learn the original TDI strategy.

The essence of this forex system is to transform the accumulated history data and trading signals.

Note: This indicator was developed by Tim Morris. AtoZ Markets does not carry any copyrights over this trading tool. Publish on AtoZ Markets. Get Free Trading Signals Your capital is at risk.