Like any other indicator, TD REI is not a Grail and sends false signals too. If both conditions are met, then there will be a different formula:ĭifferently put, TD REI a kind of shows the price movement, adjusted to a trading range over the five days. If neither of the conditions is met, a zero value is assigned to that day’s bar. the low two days earlier must be less than or equal to the close seven or eight days ago.the current day’s low must be less than or equal to the high five or six days ago.the high two days earlier must be greater than or equal to the close seven or eight days ago.the current day’s high must be greater than or equal to the low five or six days ago,.To make it clearer, the calculation formula looks like this: The TD REI value is calculated by adding the respective differences between the current day’s high and the high two days earlier and the current day’s low and the low two days earlier. It also has many peculiarities, which I will describe later.įirst, I’d like to describe its mathematical model, so that you can understand the indicator’s signals. It stands to reason that this indicator is much more complicated than it may seem, based on the above example. On the other hand, this indicator is more responsive to the price changes, and, while the RSI is still in the overbought area, or in the neutral area, the TD REI has already a few times entered the oversold area, thus sending a buy signal (in the above chart, all buy signals on the indicator are marked by circles, and by green flags on the price chart. Besides, the TD REI counts the number of bars, and, if the price is in the overbought or oversold area for more than 6 bars, the indicator shows this and indicates a strong trend. The TD REI oscillator typically produces values of -100 to +100 with 45 or higher indicating overbought conditions and -45 or lower indicating oversold. So, you see the TD REI indicator in the chart above, at its bottom. The matter is that the TD indicators are not available in the Tradingview standard library, therefore, I had to look for those that were published in the public library and only thanks to such enthusiastic programmers can you get acquainted with these wonderful tools by DeMark. This indicator is designed to filter out false signals when the price is trading in the range or in a strong trend, it should send a reversal signal only if the market sentiment really changes.īefore I present the charts with this indicator, I want to pay tribute to its developer e2E4mfck. To facilitate the analysis of all these parameters, DeMark developed his own series of oscillators that will described below.įirst, I’d like to write about TD REI, or Range Expansion Index. Therefore, in each particular case for each timeframe, one should perform an own analysis of the number of bars in the overbought or oversold zones. Everything depends on the indicator’s parameters and the peculiarities of its composition. The number of bars may be different for other oscillators. It is clear from the above chart that the two overbought zones lasted for more than 6 bars, which indicates the trend’s strength, and so, the oscillator’s correction in these cases will be a false sell entry signal.
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