This indicator is a customised version of the ADX + DMI by J. Welles Wilder in 1978, with default settings optimal for cryptocurrencies.
What is the DMI (ADX) Indicator?
According to Investopedia:
DMI (ADX) consists of three indicators that measure a trend’s strength and direction. Three lines compose the Direction Movement Index (DMI): ADX (black line), DI+ (green line), and DI- (red line). The Average Directional Index (ADX) line shows the strength of the trend. The higher the ADX value, the stronger the trend. The color of the lines can be altered, but black, green, and red are the default in most software.
The Plus Direction Indicator (DI+) and Minus Direction Indicator (DI-) show the current price direction. When the DI+ is above DI-, the current price momentum is up. When the DI- is above DI+, the current price momentum is down.
This Version
The ADX default value has been changed to from 14 to 2 (optimal for cryptocurrencies). The background flashes red when the –DMI goes above the HZ1 threshold and green when the +DMI does the same. There is an option to change it so that it’ll only flash when the ADX and the DMI are both above the threshold. The ADX changes color when above HZ1.
Red and green plotshapes appear at DMI crossovers and three horizontal lines have also been added.
Any suggestions are most welcome
Versionshinweise
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Updated notes
Versionshinweise
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Added extra color changes.
Both DMIs will change color depending on a positive or negative slope.
Plotshapes are now tiny and added notes in the script on how to change them.
Also changed default background colours.
Versionshinweise
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- Changed default colors and settings - Updated input menu
I believe the best settings for traditional is the default settings (14, 14). ADX length on 2 is best for crypto but, I have noticed it works quite well in traditional too.
Are there any other indicators that you recommend for crypto?
and which settings do you use for Dax, S&P, cfd..?