OPEN-SOURCE SCRIPT
VIDYA DMI Oscillator w/ DSL Levels [Loxx]
VIDYA DMI Oscillator w/ DSL Levels [Loxx] is a VIDYA smoothed Direction Movement Index with Discontinued Signals. These two add on features allow for more accurate signals by reducing noise.
What is the Direction Movement Index?
Within the suite of indicators that make up Wilder’s directional movement index (DMI) are the plus directional movement indicator (+DI) and the minus directional movement indicator (-DI). They provide the foundation for the more widely recognized average directional index (ADX). Whereas the ADX offers information about the strength of price movement but not its direction, the +DI and -DI furnish information about the positive or negative direction of price movement over a period of time.
Wilder provides complete information about the function and construction of all the components that make up the directional movement index in his 1978 book, New Concepts In Technical Trading Systems. In general, the plus and minus components of the DMI focus on that portion of the current bar’s trading range that is outside the range of the previous price bar. If it is higher, it is considered to be positive (+) and if it is lower, it is labeled negative (-). These values are divided by the true range and averaged over time, usually 14 periods. A move by the +DI above the -DI indicates that positive or upward price direction has overtaken negative or downward price direction. Conversely, when +DI falls below -DI, declining price either from selling pressure or lack of upward price momentum is taking control. Potential changes in direction or trend occur when the lines intersect.
What is VIDYA?
VIDYA (Chande's Variable Index Dynamic Average) is an adaptive weighted moving average indicator. It was developed by Tushar Chande as an attempt to improve the performance of the EMA (Exponential Weighted Moving Average) indicator.
Included:
What is the Direction Movement Index?
Within the suite of indicators that make up Wilder’s directional movement index (DMI) are the plus directional movement indicator (+DI) and the minus directional movement indicator (-DI). They provide the foundation for the more widely recognized average directional index (ADX). Whereas the ADX offers information about the strength of price movement but not its direction, the +DI and -DI furnish information about the positive or negative direction of price movement over a period of time.
Wilder provides complete information about the function and construction of all the components that make up the directional movement index in his 1978 book, New Concepts In Technical Trading Systems. In general, the plus and minus components of the DMI focus on that portion of the current bar’s trading range that is outside the range of the previous price bar. If it is higher, it is considered to be positive (+) and if it is lower, it is labeled negative (-). These values are divided by the true range and averaged over time, usually 14 periods. A move by the +DI above the -DI indicates that positive or upward price direction has overtaken negative or downward price direction. Conversely, when +DI falls below -DI, declining price either from selling pressure or lack of upward price momentum is taking control. Potential changes in direction or trend occur when the lines intersect.
What is VIDYA?
VIDYA (Chande's Variable Index Dynamic Average) is an adaptive weighted moving average indicator. It was developed by Tushar Chande as an attempt to improve the performance of the EMA (Exponential Weighted Moving Average) indicator.
Included:
- Bar coloring
- 3 signal variations w/ alerts
- 4 intermediate smoothing types
- Loxx's Expanded Source Types
Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
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