Traders have a variety of tools and methods at their disposal to make successful deals. Plenty of indicators can be utilized for this purpose, and the TDI traders dynamic index is one of them. All those who trade in the market need to get an understanding of it to decide whether they should use it in their work. Lots of helpful information on this index is provided in this article.
What Is TDI Index?
TDI index was developed by Dean Malone to help traders evaluate the situation in the market to find the right trading signals. It is a complex indicator because it is based on the following indicators:
- The RSI. This indicator aims at evaluating the price changes to understand when the market is overbought or oversold.
- Moving Average. This indicator helps predict the future movement of the price.
- Bollinger Bands. This indicator is based on the W-pattern, and it allows determining when the market is overbought or oversold.
How to Use the Indicator?
If there is no such indicator on the trading platform you use, it is possible to install it there. You should be able to find clear instructions on that on the Internet, or you can ask your broker for support.
Once you have it on the platform you use, you will need to adjust TDI settings. However, it is possible to leave it to work on default settings. It is recommended to trade using the indicators that TDI trading is based on first. This will give you helpful insights into the possible change in the settings.
How to Understand the Signals?
To use this indicator successfully, you need to understand its signals. There are green, red, and yellow lines. The actions of traders depend on which of them are crossing and how that is conducted. For example, if there is a crossing of red and green lines, it is a favorable situation for short-term trading. You can consider buying an asset if the red line is crossed by the green line from below. The opposite situation will give you the signal about a favorable situation to sell the asset.
TDI cannot be called straightforward. If you are a beginner, it is recommended to start working with something simpler. In particular, it can be the indicators used in this index. Once you are ready to experiment with TDI, do this in a free mode first, which should be available in a demo account.