[blackcat] L1 Enhanced DMI

10 Jun 2021

Level: 1

Background

The Directional Movement Index (DMI) is an indicator developed by J. Welles Wilder in 1978 that shows the direction in which the price of an asset is moving. The indicator does this by comparing previous highs and lows and drawing two lines: a positive directional movement line (+ DI) and a negative directional movement line (-DI). An optional third line, called the Average Directional Index (ADX), can also be used to measure the strength of the upward or downward trend.
When + DI is above -DI there is more upward pressure than downward pressure in price. Conversely, when -DI is above + DI, there is more downward pressure on the price. This indicator can help traders estimate the direction of the trend. Crossovers between the lines are also sometimes used as trading signals to buy or sell.

Function

This is a blackcat1402 enhanced DMI indicator by counting period number of +DI and -DI relationship, overbought and oversold states are given.

Key Signal

White line --> +DI
Yellow line --> -DI
Fuchsia line --> ADX
Green line --> ADXR, or averaged ADX
red OB label --> overbought
green OS label --> oversold

Remarks

Feedbacks are appreciated.


Readme

In real life, I am a prolific inventor. I have successfully applied for more than 60 international and regional patents in the past 12 years. But in the past two years or so, I have tried to transfer my creativity to the development of trading strategies. Tradingview is the ideal platform for me. I am selecting and contributing some of the hundreds of scripts to publish in Tradingview community. Welcome everyone to interact with me to discuss these interesting pine scripts.

The scripts posted are categorized into 5 levels according to my efforts or manhours put into these works.

Level 1 : interesting script snippets or distinctive improvement from classic indicators or strategy. Level 1 scripts can usually appear in more complex indicators as a function module or element.

Level 2 : composite indicator/strategy. By selecting or combining several independent or dependent functions or sub indicators in proper way, the composite script exhibits a resonance phenomenon which can filter out noise or fake trading signal to enhance trading confidence level.

Level 3 : comprehensive indicator/strategy. They are simple trading systems based on my strategies. They are commonly containing several or all of entry signal, close signal, stop loss, take profit, re-entry, risk management, and position sizing techniques. Even some interesting fundamental and mass psychological aspects are incorporated.

Level 4 : script snippets or functions that do not disclose source code. Interesting element that can reveal market laws and work as raw material for indicators and strategies. If you find Level 1~2 scripts are helpful, Level 4 is a private version that took me far more efforts to develop.

Level 5 : indicator/strategy that do not disclose source code. private version of Level 3 script with my accumulated script processing skills or a large number of custom functions. I had a private function library built in past two years. Level 5 scripts use many of them to achieve private trading strategy.

11 Jun 2021

Nota Keluaran

Add alerts

18 Apr

Nota Keluaran

OVERVIEW

The Enhanced DMI script is an advanced version of the Directional Movement Index (DMI) indicator designed for TradingView. It provides traders with enhanced signals for identifying overbought and oversold conditions in the market. The script includes customizable periods for DMI calculations and confirmation periods, making it versatile for different trading strategies. It plots key DMI components and adds alerts for overbought and oversold conditions, helping traders make informed decisions.

FEATURES

Customizable DMI period and confirmation periods.
Plots PDI (Plus Directional Index), MDI (Minus Directional Index), ADX (Average Directional Index), and ADXR (Average Directional Index Rating).
Identifies overbought and oversold conditions with labels.
Adds alerts for overbought and oversold conditions.
Uses advanced calculations for true range and directional movements.
HOW TO USE

Add the Script to Your Chart:

Copy the script code and paste it into the Pine Editor on TradingView.
Click "Add to Chart" to apply the script to your selected chart.
Customize the Settings:

Adjust the DMI Period and Confirmation Periods inputs according to your trading strategy.
The default values are set to 7 for both parameters.
Interpret the Plots:

PDI and MDI lines indicate the directional movement.
ADX and ADXR lines show the strength of the trend.
Horizontal lines at 20, 30, and 50 help identify key levels for ADX.
Use the Labels and Alerts:

Overbought conditions are marked with a red label and trigger an alert.
Oversold conditions are marked with a green label and trigger an alert.
LIMITATIONS

The script relies on historical data and may not predict future market movements with absolute accuracy.
Customization of periods may require experimentation to find the optimal settings for your specific trading style.
The script does not account for sudden market changes or anomalies that may affect DMI calculations.
NOTES

Ensure that your chart has enough historical data to provide accurate DMI calculations.
Regularly review and adjust the script settings based on market conditions and your trading performance.
The script is designed for educational purposes and should be used in conjunction with other technical analysis tools.