TDI - Traders Dynamic Index [SystemAlpha]

17 thg 9, 2020

Traders Dynamic Index [SystemAlpha] with Divergence

Credits to the original code author LazyBear and modifications by JustUncleL

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This is a Traders Dynamic Index (TDI) indicator with Price Action Channel (PAC) integration, designed for trend following and signal generation. It's written in Pine Script version 4 for TradingView.

Core Components
1. TDI Elements

• Volatility Band (VB): Blue bands using RSI ± standard deviation
  
• RSI Price Line: 2-period SMA of RSI (green)
  
• Trade Signal Line: 7-period SMA of RSI (red)
  
• Market Base Line: Orange mid-line of volatility bands
  

2. Key Parameters

• RSI Length: 13
  
• Volatility Band Length: 34
  
• Oversold Level: 22 (default)
  
• Overbought Level: 78 (default)
  

3. Signal Types
Buy Signals (when price > PAC upper):

• Strong (yellow): Trade Signal > Market Base Line
  
• Medium (aqua): RSI > Market Base Line, Trade Signal < Market Base Line
  
• Weak (blue): Both below Market Base Line
  

Sell Signals (when price < PAC lower):

• Strong (fuchsia): Trade Signal < Market Base Line
  
• Medium (purple): RSI < Market Base Line, Trade Signal > Market Base Line
  
• Weak (silver): Both above Market Base Line
  

4. Additional Features

MACD Filtering: Optional filter using MACD histogram direction
Divergence Detection: Regular and hidden bullish/bearish divergences
Heikin Ashi Option: Can use HA candles for calculations
Alert System: Multiple alert types for different signal strengths

Trading Logic
The indicator identifies entry points by combining:

• Price position relative to PAC
  
• RSI position relative to signal lines
  
• Candle direction (bull/bear)
  
• Optional MACD confirmation
  

Best Practices

• Trade in direction of main trend
  
• Best signals occur near MACD zero line crossings
  
• Avoid trading during ranging markets (flat MACD)
  
• Avoid wide PAC spreads (high volatility/choppy markets)
  
• Works best on 5min+ timeframes
  
• Recommended for forex pairs and commodities
  

This is a comprehensive trend-following system that combines multiple technical analysis elements for trade signal generation.