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DMI

Example of Conditions for Starting Trading Hello, traders. If you "Follow", you can always get new information quickly. Please also click "Boost". Have a nice day today. ------------------------------------- I will publish in advance due to an external schedule tomorrow. Accordingly, I will take time to provide additional explanations on the ideas published today. ---------------------------------------- I will talk about the basis for indicating the direction of progress shown in the chart above. In order to differentiate from other people's analyses, I am trying to explain the basis for indicating the support and resistance points or sections on the chart. I think that if you understand why those points and sections were set, you will eventually be able to understand them without having to read the explanation all the way through. For this, more support and resistance points are needed. This is because we can select the volatility period by additionally drawing the trend line. However, since all of these processes are displayed on the chart, there are many complaints that the chart is messy and confusing, so we are trying to reduce them as much as possible. Therefore, there are cases where the chart is displayed in two versions. The chart below is a chart that shows many support and resistance points and draws a trend line to select the volatility period. Therefore, since the support and resistance points may be displayed differently, it is recommended that you refer to the points or sections that I have written. - The conditions for starting a transaction are simpler than they look. However, when these conditions are met, the support and resistance points drawn on the 1M, 1W, and 1D charts must be displayed. Therefore, even if the conditions for starting a transaction are met, if the support and resistance points are not displayed at the corresponding price, you cannot start a transaction. Please read this carefully and thank you. - (It would be good to see this as an example of how to find the conditions that fit you and how to utilize them.) Conditions for starting a transaction are 1. Buying time conditions - When the StochRSI indicator rises in the oversold range and maintains the state of StochRSI > StochRSI EMA - When the BW indicator forms a horizontal line at the lowest point (0) - When the OBV indicator rises below the 0 point - When the DMI indicator rises below the 0 point 2. Selling time conditions - When the StochRSI indicator falls in the overbought range and maintains the state of StochRSI < StochRSI EMA - When the BW indicator forms a horizontal line at the highest point (100) - When the OBV indicator falls above the 0 point - When the DMI indicator falls above the 0 point When the above conditions are met, check whether there is support at the support and resistance points drawn near the price. Confirmation is used to proceed with the transaction. The current price position is 60672.0-61099.25. Therefore, you can proceed with the transaction depending on whether there is support in this section. Since it is currently falling below 60672.0, there is nothing you can do in spot trading other than cutting losses. In futures trading, you can enter with a sell (SHORT) position. - It is rare for all the conditions for starting a transaction mentioned above to be met. Therefore, it is recommended to basically check whether the BW indicator forms a horizontal line at the lowest point (0) or highest point (100), and then proceed with the transaction by checking the movement of the StochRSI indicator. Also, it is recommended to select a split sell section to make a profit by calculating the fluctuation range while checking the strength of the rise or fall with OBV and DMI. - In summary of the above, Since the StochRSI indicator has not yet risen from the oversold zone and StochRSI < StochRSI EMA, it is recommended to check whether a reversal is occurring. Also, you should check whether the BW indicator has fallen to the lowest point (0) and formed a horizontal line. If the OBV and DMI indicators rise below the 0 point without meeting these conditions, you should proceed with an aggressive purchase (a transaction that requires a quick response similar to scalping or day trading). If you do not proceed with an aggressive purchase, you should wait. - It is not a good idea to enter a current sell (SHORT) position in futures trading. However, if you proceed with an aggressive transaction (scalping or day trading), you can start trading. The reason why it is not a good condition for trading is because the price is located in the 1. purchase timing condition section among the conditions for starting a transaction mentioned above. Therefore, the profit is small or you may even suffer a loss. - If you are not currently trading, I think the section where you should trade is when it rises around 61K. Before that, it is highly likely that you will not be able to purchase because it seems like it will fall further. I think this point, or the section where you actually trade, is the psychological volume profile section. This psychological volume profile section is the section where psychology applies that you must trade even now. Since this point is ultimately a low or high point, it is a section where you are likely to incur losses if you purchase. The 61K section that I mentioned earlier is a section where it is highly likely to be a low point, so it is a section where you are likely to incur losses if you cut your loss or enter a sell (SHORT) position. - If it shows resistance near 60672.0, there is a possibility that a sharp decline will occur momentarily and touch 59K and then rise. This phenomenon can be a fake or a sweep movement, so you need to be careful. In order to avoid losses from this phenomenon, auxiliary indicators are necessary. Since auxiliary indicators are lagging, they are unlikely to show large movements in sudden price fluctuations. - What I am talking about is not a method of chart analysis, but an example of how to set a standard for trading. Therefore, I hope you do not misunderstand the above as about chart analysis. Since chart analysis and trading are different, what you see on the chart is also different. In order to complement this difference, what is needed is the support and resistance points drawn on the 1M, 1W, and 1D charts. Since charts without support and resistance points are likely to be for chart analysis, there is no need to try to find a trading point on these charts. - Have a good time. Thank you. -------------------------------------------------- - ​​Big picture It is expected that the real uptrend will start after rising above 29K. The section expected to be touched in the next bull market is 81K-95K. #BTCUSD 12M 1st: 44234.54 2nd: 61383.23 3rd: 89126.41 101875.70-106275.10 (overshooting) 4th: 134018.28 151166.97-157451.83 (overshooting) 5th: 178910.15 These are points where resistance is likely to be encountered in the future. We need to see if we can break through these points. We need to see the movement when we touch this section because I think we can create a new trend in the overshooting section. #BTCUSD 1M If the major uptrend continues until 2025, it is expected to start by creating a pull back pattern after rising to around 57014.33. 1st: 43833.05 2nd: 32992.55 -----------------
Education
by readCrypto
A Renko Trading Strategy with Multiple Indicators (update 1)This will serve as an update to the previous discussion specifically to some of the chart settings and the approach. Going into the open on 25-March-2024, I was looking for price to move lower to test the monthly and yearly Camarilla R3. My reasoning was that neither seemed to have been tested yet and that these two together would provide a good level for support. My long term view on crude oil is bullish and I believed this type of action would provide a good entry point. However, this plan did not come through so I stood aside to let the market playout to determine another entry strategy. While watching the market in the charts I had published earlier, I decided to make some adjustments to see if I would have detected the market’s plan sooner providing an entry point. The following are the changes that I’ve made: Changed the timeframe of the Renko chart from 15 minutes to 1 minute. Without paying for a higher subscription in TV, 1 minute is as low of a timeframe as you can go with Renko. This alone changed the dynamics of the chart with a different view on the DMI and Stoch. Changed the slower Stoch from 25,3,3 to 50,3,3 (which is a setting I’ve experimented with in the past. The DMI remained the same as did the levels of importance for the ADX of 35 and 20. Added the BPP (Bull Bear Power) indicator and set it to an interval of 50. I’ve not used this indicator before but was experimenting with some items yesterday and found this. I set the line to a step line and you can see the results here. Added a 2-hour candle chart next to the Renko and will use it in conjunction with the Renko chart to make entry/exit decisions. Removed the manual Linear Regression from the Renko chart and have added them to the 2hr chart. This is a more natural fit and have maintained the default settings. I have added two LR indicators with one at 1 STD and one at 2 STD. Removed the manual drawings of the Camarilla pivots and have added them as indicators to the 2hr chart. Removed the volume profile from the Renko chart and have added it to the 2hr chart with a week timeframe. All markup for volume area, opening range, etc. will be put on the 2hr chart and will be for a weekly view. The Renko chart will remain to work for timings of entry and exits. Considering the 1-minute chart, you can see that there was a buy signal across several of the setups. As noted earlier, the consolidation on the 1 minute/25 tick Renko chart provided a signal that a breakout was coming. The slower Stoch set to 50,3,3 provided some insight into the direction with the break of the %k up over the %d and lastly, the new BBP gave an indication that the down move was a correction and that higher prices could be coming. A long wick and breakout of consolidation would have been a trigger to enter a trade of buying a Call option (see green arrow on Renko). Looking at the 2hr candle chart with the 2 linear regressions (1 and 2 STD respectively), then you can see where the support was formed then then where resistance was hit. The monthly and the weekly R4 provided resistance and now support is at the median of the current LR. Because the break of the weekly R3 was with a force with no test, my plan now is to find an entry long (an August Call) along this line which is also the same proximity of the weekly Pivot and the top of the week’s opening range (where the opening range for the week is defined as the first 5 2hr candles of the week. With a red brick in place on the 1 minute/25 tick chart, a green brick now would be a buying opportunity. I’ve added a consolidation channel across levels of what could be support for any pullback and could see another 25-tick brick in place before the green brick to the upside.
NYMEX:CL1!Education
by mxb1961
DIRECTIONAL MOVEMENT INDEX (DMI) EXPLAINED The Directional Movement Index (DMI) is a technical indicator used in financial markets to analyze the strength and direction of price movements. It was developed by J. Welles Wilder and is a component of the larger Average Directional Index (ADX) system. The DMI consists of two lines: the Positive Directional Indicator (+DI) and the Negative Directional Indicator (-DI). These lines are used to determine the strength of upward and downward price movements, respectively, and to generate trading signals. Here's how the DMI works: Calculation of True Range (TR): True Range measures the volatility of a financial instrument over a given period. It is calculated as the greatest of the following three values: The difference between the current high and low prices. The absolute value of the difference between the current high and the previous close. The absolute value of the difference between the current low and the previous close. Calculation of Directional Movement (DM): Directional Movement measures the upward and downward movement in prices over a given period. It is calculated as follows: Upward Movement (DM+): If the current high is higher than the previous high, and the current low is higher than the previous low, then DM+ equals the current high minus the previous high. Otherwise, DM+ is zero. Downward Movement (DM-): If the previous low is lower than the current low, and the previous high is lower than the current high, then DM- equals the previous low minus the current low. Otherwise, DM- is zero. Calculation of the Average True Range (ATR): ATR is an exponential moving average of the True Range over a specified period. Calculation of the Positive Directional Indicator (+DI) and Negative Directional Indicator (-DI): +DI: It is calculated by dividing the exponential moving average of DM+ by the ATR and multiplying the result by 100. -DI: It is calculated by dividing the exponential moving average of DM- by the ATR and multiplying the result by 100. The +DI and -DI lines provide information about the strength of upward and downward price movements. When the +DI line is above the -DI line, it indicates bullish strength, suggesting that buyers are in control. Conversely, when the -DI line is above the +DI line, it indicates bearish strength, suggesting that sellers are dominant. Additionally, traders often look for crossovers between the +DI and -DI lines. A bullish signal occurs when the +DI line crosses above the -DI line, while a bearish signal occurs when the -DI line crosses above the +DI line. These crossovers can be used to generate buy and sell signals. The DMI is often used in conjunction with the Average Directional Index (ADX), which measures the overall trend strength. The ADX can help confirm the signals generated by the +DI and -DI lines. It's important to note that the DMI is just one tool among many used by traders and investors to analyze markets, and its effectiveness may vary depending on the specific financial instrument and market conditions. It's advisable to use the DMI in combination with other indicators and analysis techniques for comprehensive decision-making. Visual Examples of how to use the tool. You may also consider changing chart types to Hieken Ashi in order to smooth price data to prevent false trend changes You can see in the image below a lot of the false trend changes where remove The Average Directional Index (ADX) is a component of the Directional Movement Index (DMI) system and is used to measure the strength of a prevailing trend in the market. While the +DI and -DI lines of the DMI indicate the strength of upward and downward price movements, the ADX provides an overall assessment of the trend's strength, regardless of its direction. The ADX is calculated based on the smoothed averages of the +DI and -DI lines. It is typically displayed as a single line on a separate chart, ranging from 0 to 100. The interpretation of the ADX reading is as follows: ADX below 20: This indicates a weak or non-existent trend. It suggests that the market is in a consolidation phase or is experiencing erratic price movements. Traders may choose to avoid trading or use range-bound strategies during such periods. ADX between 20 and 40: This suggests the development of a trend. As the ADX moves toward 40, it indicates increasing trend strength. Traders may consider entering trades in the direction of the prevailing trend, as it suggests that the market is becoming more directional. ADX above 40: This signifies a strong trend. A rising ADX indicates a strengthening trend, while a falling ADX suggests a weakening trend. During such periods, traders may prefer trend-following strategies and look for opportunities to ride the momentum. ADX above 50: This indicates an extremely strong trend. A reading above 50 suggests a robust and well-established trend. Traders may choose to stay in their positions and avoid counter-trend trades. It's important to note that the ADX does not indicate the direction of the trend, only its strength. Therefore, it is often used in combination with the +DI and -DI lines to confirm the presence of a strong trend and its direction. For example, when the ADX is rising above 20 and the +DI line is above the -DI line, it suggests a strong bullish trend. Conversely, when the ADX is rising above 20 and the -DI line is above the +DI line, it suggests a strong bearish trend. By considering the ADX in conjunction with the +DI and -DI lines, traders can gain a more comprehensive understanding of the market conditions and make informed decisions about entering or exiting trades. Visual Example of the use of the ADX line below
Education
by ChristopherDownie
ICHIMOKU-DMI-RSI-setupWhen DMI is above 20 and top of Histogram sticks on DMI = Green --- go Long and top of Histogram sticks on DMI = RED --- Short NOTE: If candles are far away from cloud, try to wait for a better entry, as candles move toward the cloud and thru moving averages for support/resistance entries. If DMI is below 20 , no entry Above the cloud is long, Below the cloud is Short As candles move thru the cloud, long or short, enter as it exits the cloud, then use the cloud edge as stop loss. Use the RSI as it nears top or bottom for possible long/short exits. BUY and SELL triangles to help with possible entry / exit points. 120 day MA added for reference point to I mostly use this on 1 min, 3 min and 5 min for daytrading futures, stocks. Can be used on anything. Higher time frames are more for swing trading.
CBOT_MINI:YM1!Education
by bullreporter99
An oppertunistic shake-outSince I've posted the previous chart (on 1th of may) we can see the TTM squeeze hasn't completed yet (marked in upper chart with yellow circles). But in my previous post, I've also explained how I use this DMI indicator to signal the start of a new trend. measure the fading trendline untill its end. track the intermediate bearish pushes up till strength 40 The focus on strength 40 wasn't the right way to look at it. All the pumping happening at the time got to me, making me grow impatience. Because since I've posted that chart, these pushes became more dominant. And now we have had two consecutive bearish pushes. This can be described in two ways. The first explanation (oppertunistic shakeout, my prospect. Previous analysis still applies): When the trend is stale in both directions, it doesn't take a lot of force to move the price significantly. What this means is (I try to explain in layman's terms) less bears are necessary when the bulls are absent and vice-versa. The price shift is caused by opportunistic trades and do not have a fundamental catalyst. This does not cause a change in prospects but is psychologically torturing traders with long positions. The second explanation, the reversal engages and a trend down is set. This is a premature conclusion and the chart is misinterpreted. I like to point out, misinterpreted. Not a false signal . It is extremely hard to predict a reversal (means charting before a reliable confirmation signal has happened). The DMI can be used for these things if used accordingly. We have 3 points in our chart that tell us we can't predict a reversal 'reliable'. 1. If we were to chart a new trend, this can only happen after the current trend halts. - An example of a flaky trend stop signal would be on 23rd-24th april. - An example of a clear trend stop signal would be on the 20th of march No trend halts abrupt, nor is the halt always very clear. But we can see pretty obvious that the combined trend hasn't dropped below 20 since the 1th of may. It has come close to 20, but didn't drop below it. And even if it did, it would take an additional bar (longer silence = more reliable) for an acceptable trend stop according to my own methods. 2. Both bearish pushes had less strength than past bullish push 3. The second bearish push was weaker than the first one, while the last bullish push was stronger than the bullish push before that. If you enjoyed reading this please leave a comment. If you have any questions, please DM me. I can imagine you have questions, i am happy to answer them personally. As I am a small analyst with few followers, comments actually give me huge dopamine rushes.
Education
by UnknownUnicorn12005085
1
Heikin-Ashi + DMI + Pitchfork = A super easy trend system!I have been trading this system recently and have been surprised at how easy it is to trade with a predominant trend. Using a unique 3-indicator system composed of Heikin-Ashi + the DMI + Pitchforks allow a trader to reduce chart noise and stay in a trade until the trend has exhausted itself. The basic rules of the system include waiting for buy signals on both the Heikin-Ashi and the DMI and then exiting a trade when both the DMI and Heikin-Ashi have given sell signals. The Pitchforks serve as hidden support and resistance and help the trader with placing stop losses based on swing points of the candles and the next nearest pitchfork support lines to minimize chances of stops being triggered. The Pitchforks are also useful for identifying potential reversal zones to enter and exit trades if a trader notices particular pitchfork lines support price more significantly than others. Extra layers of support/resistance confluence can be added with Fibonacci Retracements and Extensions/Projections at these potential price reversal zones. I personally do this myself but the chart does get a bit cluttered and was hard to show clear entrance/exits with them included on here in this photo. I personally use this on shorter time frames (3min) and it is just as accurate, however, TradingView requires a minimum 15-min resolution to post an idea. I imagine, as with all trades, the longer the time frame the stronger the signals, and the shorter the choppier the trades could get with being stopped out. While I have not tested this extensively, reversing this system for a short does work as well (data not shown on this chart). I have not tested longs or shorts on futures or Forex, so YRMV, and I would suggest testing extensively before implementing on those markets. Illustration of this system can be seen on $FUV on the 15min chart. It shows two trades, first with a trade of 51% profit and a second of 24%. Average return over two days was 37.5% profit. Pros of this system: Very easy to use to identify and trade in the direction of the predominant market trends Makes it easy to identify Elliot Waves, XABCD, or ABCD market geometry setups due to the nature of the Heikin-Ashi Candles Ample noise reduction for "nervous" or new traders to make sure they catch the most of a trade trend with easily identifiable entrances and exits PDT traders may find this system on longer periods/for swings more agreeable than day trading since it minimizes number of trades and maximizes potential return Traders with full time jobs may find this more agreeable as it is a "set-it and forget it" type of system where they can schedule alerts/exits on the DMI cross over threshold to focus on other important things Cons of this system: Trading during ranged markets can lead to being stopped out or quickly lost profits (additional period length or higher level can minimize this risk, see below) Missing out on "perfect" entry and exits due to combining two lagging indicators Heikin-Ashi does not represent "true" chart price and it is recommended to add the real stock price on the chart somehow or have broker open with true price to not miss a potential entrance/exit if price reverses quickly/strongly System Settings: Heikin-Ashi = Standard DMI length = 5 period, 20 level (can adjust both period and level higher or lower depending on needs of the trader. Longer = less profit but stronger signals; shorter = max potential profit but more frequent trading/more chop). Pitchfork = Schiff (change angle more vertical to Modified Schiff or Original as trend goes outside of Schiff Fork if needed. I prefer to just clone the Schiff and move it higher or lower above the main fork since I trade corrections).
FEducation
by christoefert
4