Traders Dynamic Index (TDI) indicator

 Traders Dynamic Index (TDI) indicator is a complex indicator that consists of the following indicators:

1. RSI (Relative Strength Index)
2. Moving Average  To smooth RSI
3. Bollinger Bands (BB)  Or in this case we should only refer to them as volatility bands

RSI helps us with:

1.       Trend recognition: trading in the direction of the trend

2         Overbought and oversold entry signals

MA helps us with:

1.       Smoothing RSI

Volatility bands help us with:

1.       Trend straight recognition

2      Trend direction

Pivot Points Strategy

 Pivot points can be used as entry points for new trades or as a close signal for the existing ones.

There are different types of pivot points with a different mathematical formula or simply using previous highs and lows.

How to trade Pivot points

The following scenarios work with the Traditional Pivot Points

For the Camarilla version normally R and S are closer to the price and we use a different setup.

Trading setup #1 (Not so strong trend): Open price is between R1 and S1

• Long when the price moves back above S1 after going below S1. Target will be P, R1, R2, .. levels.
• Place Stop loss at the S2 level
• 
  
• Wait for the price to go above R1 and then when it moves back below R1 again, go short.
• Profit target will be P, S1, S2 S3 levels and stop-loss above R2

Trading setup #2 (Normally very trendy bullish markets): Open price is between R1 and R2

• Buy or go long when the price moves back above R1 again after going below R1. Target will be R2,
• Place stop loss at R1
• 
  
• Wait for the price to go above S1 and then when it moves back below S1 again, sell or go short.
• Target will be  S2 levels, and the stop loss will be above P. 

Trading setup #3 ( Very trendy bearish market ): Open price is between S1 and S2

• Wait for the price to go above S1 and then when it moves back above S1 again, then go long.
• Target will be P, R1, R2 levels, and stop-loss below S2.
• Wait for the price to go below S4 and then when it moves below S2, go short.
• Place stop loss above S1. 

Trading setup #4 (High probability for a trend reversal or correction): Open price is above R2

• Buying can be risky at this level. Wait for the price to go below R2.
• As soon as the price moves below R1. go short.
• Place stop loss above R3. Target S1 , S2 or P

Scenario #5 (High probability for a trend reversal or correction): Open price is below S2

• Selling could be risky at this level as the price has opened with a big gap down.
• Wait for the price to go above S1.
• When the price moves above S1, buy
• Place a stop loss of S2. Target R1, R2, and P.

MILAN OSCILLATOR INDICATOR

The most important signals are related to the divergence.

A recap for divergence from previous lessons: 

Divergence and Hidden Divergence

Positive Divergence is bullish and occurs in a downtrend when the price action prints lower lows that are not confirmed by the oscillating indicator.

Negative Divergence is bearish and occurs in an uptrend when the price action makes higher highs that are not confirmed by the oscillating indicator.

Bullish Hidden Divergence occurs during a correction in an uptrend when the oscillator makes a higher high while the price action does not as it is in a correction or consolidation phase.

Bearish Hidden Divergence occurs during a reaction in a downtrend when the oscillator makes a lower low while the price action does not as it is in a reaction or consolidation phase.

Other Signals can be crossing 0 lines or confirmation of change of bars colour.