This indicator is a customised version of the + DMI by J. Welles Wilder in 1978, with default settings optimal for cryptocurrencies.
What is the DMI ( ) Indicator?
According to Investopedia:
DMI ( ) consists of three indicators that measure a trend’s strength and direction. Three lines compose the Direction Movement Index (DMI): (black line), DI+ (green line), and DI- (red line). The ( ) line shows the strength of the trend. The higher the 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.
The 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 does the same. There is an option to change it so that it’ll only flash when the and the DMI are both above the threshold. The 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
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.
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 a publication is governed by House Rules. You can favorite it to use it on a chart.
This rsi is pretty good
and I use this stochastic
MACD is always good. Other than those, I mostly use custom indicators.
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.