Table of Contents
What Does TDI Index Mean?
Many Forex traders believe that they can find a system generating signals with a high probability of profitable trades. It would be easy to reap steady profits by just following its rules. TDI trading seems to be exactly the strategy that provides simple and highly probable signals for entering the market, which makes it extremely popular. Let’s explore its basic features to assess the possible benefits.
How It Is Made
TDI traders dynamic index is based on the standard RSI indicator, which determines how strong the current trend is and how fast the price will change. The Moving Average algorithm, showing the average price of a currency pair over a certain time and highlighting its direction, serves to smooth the lines. Bollinger Bands, another classic tool capturing directed price movements, are instrumental for estimating the fluctuation amplitude and the trend direction. Thanks to this integrated approach, the TDI index works as a full-scale trading system, which is quite effective for revealing the current state of the market.
What It Looks Like
As it follows from the above, the indicator includes five lines. Red and green RSI lines are smoothed according to different averaging periods. The first one comes with a longer period and is called signal, while the second is based on a shorter period and is known as fast. Bollinger Bands are also built on RSI, yet without any smoothing. This indicator adds three more lines to the screen. Two of them are blue, making up the upper and lower volatility bands. The middle line is orange, serving to determine the direction of the current movement. Most of the time, it is located between levels 32 and 68, while crossing the levels hints at reversals.
What It Shows
When combined together, all these indicators deliver a good deal of information, displaying the direction where the price is moving and the strength of the trend. The TDI indicator also covers the prevailing bullish or bearish moods and the volatility level. Obviously, it is able to spot the moments in the market for you to buy or sell.
How to Get It
The standard package of the MT4 and MT5 terminals doesn’t contain this tool, so you need to copy the indicator files to a folder on your computer. The indicator comes with multiple options, and you can customize its numerous settings to fit your trading style. However, it is not recommended to change default TDI settings until you learn the basics and test the system.