Introduction to the Traders Dynamic Index Indicator
The Traders Dynamic Index indicator first appeared in the early 2000s. It was originally created by Dean Malone.
At the first glance, it may look a bit complex, but the TDI is simply the result of combination of four following forex indicators:
- RSI (green line);
- Moving Average for signals (red line);
- Bollinger Bands with a setting of 34 and a Standard Deviation using the Fibonacci golden ratio number of 1.6185 (blue volatility bands);
- Moving Average set to 34 (yellow market baseline).
The main idea behind TDI was to give traders a full picture of the current Forex market situation.
The indicator is displayed in a separate window placed just below the main trading chart.
It fits all kinds of timeframes and currency pairs.
The default settings can be modified directly from the input tab. Feel free to experiment with the settings and parameters to fit your personal preferences.
How does it work? How to apply in trading?
Trading Rules Explanation
Signals provided by the Traders Dynamic Index Indicator are really intuitive and easy to understand. Simply follow the suggestions below.
Buy Entry: Open long trade when the market baseline value is above 50 level and the green line crosses above the red line. Place your stop loss a few pips below the last swing low.
Sell Entry: Open short trade when the market baseline value is below 50 level and the green line crosses below the red line. Place your stop loss a few pips below the last swing high.
Exit Trade / Take Profit: Close your open position when the RSI exceeds 68 level (for buy) or 32 level (for sell). You can also use important support/resistance level or the opposite signal.
As always, to achieve good results, remember about proper money management. To be a profitable trader you need to master discipline, emotions, and psychology. It is crucial to know when to trade, but also when not to trade. Avoid trading during unfavorable times and market conditions like low volume/volatility conditions, beyond major sessions, exotic currency pairs, wider spread, etc.
Example of GBP/USD D1 Chart
This screenshot below shows an example of the Traders Dynamic Index Indicator in action.
How to set up the Traders Dynamic Index indicator in MT4?
Copy and paste the TDI_RT.ex4 or TDI_RT.mq4 indicator files into the MQL4 folder of the Metatrader 4 trading platform.
You can gain access to this folder by clicking the top menu options, which goes as follows:
File > Open Data Folder > MQL4 > Indicators (paste here).
Now go to the left side of your MT4 terminal. In the Navigator find the gauge name, right-click it and select Attach to the chart.
The Traders Dynamic Index indicator is well worth adding to your trading collection but remember about having realistic expectations. Just like any other technical analysis tool, is not capable of providing accurate signals 100% of the time. Thus, this forex indicator provides false signals occasionally. Its performance will vary significantly depending on market conditions. Feel free to develop your own trading system based around it.
Traders Dynamic Index Indicator Free Download
To download the Traders Dynamic Index Indicator for Metatrader 4 (MT4) for free just click the button below: