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The Wilders DMI indicator is a small trading strategy that uses the calculations of standard forex indicators. This trading algorithm is universal and can be used for various trading purposes. Thus, the indicator is suitable for determining the strength and direction of the current trend, opening trades during this period, as well as determining its presence or absence. It is presented in the lower window of the price chart in the form of a colored histogram, as well as in the form of four intersecting lines, in addition, in the main window of the price chart there are arrows of a certain color and direction. To open a specific trade using the indicator, all its current values should be taken into account.
The Wilders DMI indicator is suitable for trading any currency pairs, on any timeframe, while there is a parameter in the indicator settings that allows you to use the indicator in multi-timeframe mode.
Input parameters
The Wilders DMI indicator settings consist of several sections. The Input Parameters section is quite advanced and its parameters are responsible for the technical operation of the indicator. The Colors section is used to change the overall visualization of the indicator, while the Levels section is used to add signal levels to the indicator window.
-TimeFrame - parameter for using the trading timeframe. By default, it has the Current time frame value.
-DmILength - length of Dmi indicator calculations. The default value is 14.
-ShowADX - parameter for the presence of the ADX indicator in the indicator window. The default value is true.
-ShowADXR - ADXR lines presence parameter. By default it is set to true.
-Level - value of the signal level of the indicator. The default value is 20.
-alertsOn - parameter for the presence of indicator alert notifications. The default value is true.
-alertsOnCurrent - parameter to have a notification on the current bar. The default value is false.
-alertsMessage - parameter for sending a message in the main chart window when there are signals. The default value is true.
-alertsSound - option to sound notification when an alert is received. The default value is true.
-alertsNotify - option to notify a mobile device when an alert is received. The default value is false.
-alertsEmail - Email notification parameter. Default value is false.
-soundFile - sound notification file. The default value is alert2.wav.
-ShowArrows - parameter for the presence of arrows in the main window of the price chart. By default, it is set to true.
-arrowsIdentifier - indicator responsible for the indicators of arrows. The default value is DMI Arrows 1.
-arrowsUpperGap - space between bars and arrows with growth value. Default value is 1.5.
-arrowsLowerGap - space between arrows with falling value and bars on the chart. The default value is 1.5.
-arrowsUpColor - the color of the arrow with the growth value. The default value is LimeGreen.
-arrowDnColor - The color of the arrow with the falling value. The default value is Red.
-arrowsUpCode - visualization code for arrows with growth value. The default value is 241.
-arrowsDnColor - arrow code with falling value. Default value is 242.
Indicator signals
Despite the presence of a large number of values, the Wilders DMI indicator is easy to use. To open a specific trade using the indicator, it should be determined the current trend using the indicator values. That is, when trading, it should be considered the direction and color of its histogram, the intersection and direction of its lines, as well as the color and direction of the arrow on the chart. If the trend is upward, long positions are opened, if the trend is downward, short positions are opened. It should be borne in mind that the trade must be confirmed not only by the current trend but also by the indicator signal.
Signal for Buy trades:
- The histogram of the indicator has a color with a growth value and is located above the signal level. The indicator lines intersect so that the fast line is higher than the slow one and the two signal ones. An upward arrow is formed on the chart.
Upon receipt of such conditions on a signal candle, a buy trade may be opened, due to the presence of an uptrend and the signal of the indicator. Upon receipt of the opposite conditions from the indicator, the trade should be closed. At this moment, a change in the current trend is possible, which in turn will allow considering the opening of new trades.
Signal for Sell trades:
- A downward arrow is formed on the chart. At this moment, the indicator histogram has a color with a falling value and is directed downward, and its lines intersect so that the slow line is higher than the fast one and two signal ones.
A sell trade, due to the presence of a downtrend, can be opened immediately upon receipt of such conditions on a signal candle. Close trade and consider opening a new one should be when the current trend changes, namely at the moment the opposite conditions are received from the indicator.
Conclusion
Wilders DMI is a very efficient trading algorithm that is based on the functioning of several accurate time-tested trading indicators. Although the indicator is very easy to use, it is recommended to practice on a demo account, which will allow not only using the indicator correctly, but also getting the necessary trading skills.
