The ( ) developed by J. Welles Wilder is a pulse oscillator that measures the speed and change of price movements. The hovers between zero and 100. Traditionally, the is considered overbought when it is above 70 and oversold when below 30. Signals can be generated by looking for divergences and error fluctuations. can also be used to identify the general trend.
The Index (DMI) is an indicator developed by J. Welles Wilder in 1978 that indicates the direction in which the price of an asset is moving. The indicator compares previous highs and lows and draws two lines: a positive line (+ DI) and a negative line ( ). An optional third line called ( DX ) shows the difference between the lines. When + DI is above there is more upward pressure than downward pressure in price. When is above + DI, the price continues to fall. 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.
L1 Composite RSI-DMI Reversal Indicator combines J. Welles Wilder's and DMI indicators together to identify trend reversals.
swinglow --> swing signal
trend --> trend signal to identify top reversal
Pros and Cons
1. it exhibit leading character
2. it can disclose top and bottom reversals
1. noise exists
2. depends on market and trading pairs
Composite J. Welles Wilder indicator
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.
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