TDI - Traders Dynamic Index with DIV RSI Alerts

The TDI - Traders Dynamic Index [Goldminds] with DIV RSI Alerts indicator is a comprehensive momentum and trend-tracking tool that combines Relative Strength Index (RSI), moving averages, and volatility bands to identify market sentiment and potential trend reversals.

Usage

This script provides a multi-layered approach to market analysis by visualizing price sentiment through the interaction of its internal components:

• Sentiment Analysis: The "Fast MA" (Red) and "Slow MA" (Blue) represent short-term and medium-term momentum. When the Fast MA crosses above the Slow MA, it typically indicates a bullish momentum shift.
• Volatility Bands: The indicator includes upper, lower, and middle bands calculated based on standard deviations of the RSI. These act as dynamic overbought and oversold levels tailored to current market volatility.
• Divergence Identification: The tool automatically identifies and labels Regular and Hidden Bullish/Bearish divergences between the RSI oscillator and price action. These labels help traders spot potential exhaustion or trend continuation points.
• Alerts: Integrated alert conditions allow users to be notified of RSI crossovers and various divergence types in real-time.

Details

The Traders Dynamic Index (TDI) is built upon a standard RSI foundation, which is then smoothed using moving averages to filter out market noise. The volatility bands (similar to Bollinger Bands but applied to RSI) provide a framework for understanding if the current momentum is overextended relative to its historical mean.

The divergence logic uses pivot lookback periods to identify "highs" and "lows" in both price and the RSI oscillator. By comparing these points, the script determines if price momentum is diverging from price action, offering a leading signal for potential trend changes.

Settings

Main Settings

• RSI Period: The lookback period used to calculate the base RSI value.
• Band Length: The period used for calculating the volatility bands and the baseline.
• Fast MA on RSI: The period for the fast-reacting signal line.
• Slow MA on RSI: The period for the slower-reacting signal line.

Divergence Settings

• Pivot Lookback Right/Left: Determines the number of bars required to confirm a pivot high or low.
• Max/Min of Lookback Range: The range of bars within which a divergence must occur to be valid.
• Plotting Toggles: Options to enable or disable the visualization of Regular and Hidden Bullish/Bearish labels.

FAQ

How do I use the alerts for this script?

You can create an alert by pressing Alt + A on Windows or Option + A on Mac while the chart is active. Select the indicator from the "Condition" dropdown and choose your preferred trigger (e.g., Regular Bullish or Fast MA Cross).

What is the difference between Regular and Hidden divergence?

Regular divergence typically indicates a potential trend reversal, while Hidden divergence often suggests trend continuation.

How can I access this indicator?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.