Traders Dynamic Index (TDI)

The Traders Dynamic Index (a.k.a. the TDI indicator) is a trend following momentum indicator based on the RSI. A post discussing different ways of using it, is available in our Spotlight on the Traders Dynamic Index Indicator (with video). A second post on the TDI indicator discussed how to implement a strategy concept using Bloodhound from Shark Indicators..

Traders Dynamic Index indicator for NinjaTrader

Indicator Description

The RSI calculation itself applies slightly different settings than the standard RSI version. First, the standard setting use a 13 period average, not the standard RSI 14 period. Secondly, a smoothing period of 2 is used vs. the customary 3 bars applied to the standard RSI. Finally, one may note that the Traders Dynamic Index indicator apply the SMA as the basis for its calculation, not the EMA used for the standard RSI.

Traders Dynamic Index parameters:

The Traders Dynamic Index indicator comes with the following parameters:

  • The Priceline, which is a SMA(2) of RSI(13)
  • The Signalline, which is a SMA(7) of RSI (13)
  • The Midband, which is a SMA(34) of RSI (13)
  • The BollingerBands around the SMA(34) using 1.62 StdDev

One may consider the below conditions as trade rules:
– go long, if Priceline > 50
– go short if Priceline < 50
– consider an exit, if Priceline is above 68 or below 32

– go long if Priceline > Signal line
– go short if Priceline < Signal line
– exit if Priceline crosses Signal line

– trend filter long, when Priceline > Midband
– trend filter short, when Priceline < Midband

– add to long, when Priceline > BollingerBand.Upper
– add to short, when Priceline < BollingerBand.Lower

The Traders Dynamic Index may be used for a variety of setups, for example with a Daily Regression Channel, Donchian Channel or Heikin Ashi trend bias as described in our Indicator Spotlight. Finally, setups can be confirmed with volume or range analysis, for example using the Force Index and/or the Relative Ranges as described in our Indicator Spotlight newsletter.

Other Library Indicators

By applying the Library Roofing Filter you may correct distortions in the fixed scale threshold readings.  The MESA Stochastics indicator comes with an integrated Roofing Filter. If you use an oscillator that do not apply a fixed scale, you may review our Indicator Spotlight on the Z-score and normalization.

Other than the TDI indicator, our standard momentum oscillators category feature a number of other entries, such as the Acceleration Deceleration, Double Smoothed Momentum, Know Sure Thing, LBR 3/10, Stochastics, Fast Stochastics and the Relative Strength Index. We also have a category for advanced oscillators, with among others the Laguerre RSI, Connors RSI, Projection Oscillator and the SVE Stochastics ITF. These tools build on the same concept as the standard momentum oscillators, but with a higher degree of sophistication. In general, they allow for added value approaches, utilizing a set of more complex algorithms.

Finally, you may consider using the indicator in combination with Daily Pivots support / resistance levels. A complete overview of the NinjaTrader Indicators Library is available here.

The Traders Dynamic Index indicator is available for NinjaTrader 8.

Traders Dynamic Index (TDI)