DMI Histogram Indicator

16 set

The Directional Movement Index (DMI) was originally developed by J. Welles Wilder Jr. in 1978. Wilder introduced the DMI along with the Average Directional Index (ADX) in his book, “New Concepts in Technical Trading Systems,” which became a foundational reference for technical analysis.

The indicator can be a bit intimidating for people to interpret if they aren't familiar with it. So this DMI Histogram uses the underlying DMI data to present a different way to visualize the price movement and trend. The goal is to help provide insight into the rising or falling momentum behind the price, at times when the chart itself may not be as obvious. This could potentially help spot a momentum divergence before it plays out on the chart.

The user has the option of displaying ADX reversals as red and green arrows. The ADX is the trend indicator portion of the DMI. When it changes direction, that sometimes leads to shift in who is exerting the most influence on the price, buyers or sellers.

The user also has the option of coloring the candlesticks to match the histogram.

This indicator is meant to be combined with other indicators and other chart analysis tools.

22 set

Note di rilascio

Updates the script to include some useful alerts:

ADX Bear Trend Reversal?
message = "Possible Bearish Reversal - ADX pivot downward while +DI > -DI"

ADX Bull Trend Reversal?
message = "Possible Bullish Reversal - ADX pivot downward while -DI > +DI"

ADX Cross Above +DI
message = "ADX crossed above +DI"

ADX Cross Above -DI
message="ADX crossed above -DI"

ADX Cross Above it's MA
message="Possible Trend Strengthening - ADX pivot upward"

Bullish DI Cross
message="+DI crossed above -DI (Possibly Bullish)"

Bearish DI Cross
message="+DI crossed below -DI (Possibly Bearish)"