Traders are able to monitor the market from multiple perspectives using the TDI Divergence of RT Alerts. It helps to determine the direction as well as the strength of the trend and also the volatility of the market.
In this article, we will delve into the role of the TDIRT Divergence of Alerts indicator and how it can be used to help you with any trading plan.
What is What is the TDI indicator?
When it was first introduced in 2005, the TDI was an early indicator. A dynamic index to track the market and identify signals to trade the market.
The TDI was built on top of the underlying RSI indicator. It determines the strength, or degree of price volatility, that the market is experiencing. Moving average techniques are used to smooth the lines, and along with Bollinger bands are employed to determine the intensity of the fluctuations. Thanks to the integrated approach, the TDIRT warning divergence indicator can be used to create a trading system that is comprehensive in itself.
This trading tool shows both the direction as well as the speed of the current trend, and it allows traders to choose the best time to start investing. Despite its complex nature, the operation of the indicator is easy to understand.
The green line reflects the market sentiment and is similar to the RSI. It illustrates how the market reacts to negative and positive expectations.
The red line represents the intersection with the green line. It is used for market entries and exits.
The yellow line represents the general sentiment of the market. It represents the direction of the overall market.
In addition, we are left with two blue lines: one above the other and one below. These blue lines, similar to Bollinger Bands, show the volatility of the market.
How do I use to use the TDI indicator?
This indicator is a way to determine what is happening in the market. The green line that appears in front of the red line marks a shift from an upward trend to a downward trend in the short term. If the green line is below the red line, the trend is shifting to the downside in the short term.
The most prominent line in the TDI indicator is its yellow line. This line connects all the other components that make the indicator tradable. Long-term trends are able to be identified by using this yellow line. If this line deviates from these boundaries, it signals a possible change in the trend.
In addition, this indicator also indicates the current strength of the market.
The steeper the gradient of the green line, the stronger the market participant. Conversely, if the line is vertical rather than horizontal, this means we are in an inactive market.
An increase in the width of the Bollinger Bands indicates an increase in volatility. However, a decrease in the lines indicates a decrease in volatility. When these lines become significantly narrower, it is possible to prepare for the announcement of important reports or other news that could have a significant impact on the market. In this case, it is recommended not to trade for a while.
Trading strategies based on the TDI indicator
This indicator is suitable for trading in the short and medium term. It is recommended to use a time frame of H-1 or better quality in order to find signals using the TDI indicator.
TDI Buy Setup
The green line must be higher than the red and yellow lines.
Wait patiently for a bullish candlestick to appear
Set a stop close to the recent low
Exit the market when the line is below the red line.