The code I posted is one I found on the net, but it's incorrect. It turned out to be someone's modification of the StochasticRSI. You can find the correct code on ThinkScripter | thinkScript Indicators for thinkorswim in his (Eric's) latest bundle of TOS indicators. However, it's in the PRO package, which costs about $50. Eric is a superior programmer, and joining his forum is well worth the fee. He has coded or corrected my coding for several indicators. I asked him to code the Traders Dynamic Index, and he did it!! He's a great guy!
Now, as for the usefulness of the TDI, I decided not to use it after all. It's a messy and hard to read indicator. Instead, I'm using Eric's "Stochastic Momentum Index" (available for FREE in his INDICATOR section. I believe it's superior to the TDI. It will give you advance notice of the end of a swing, and it rarely becomes embedded. It's a REALLY good indicator. If you place them on the same chart and compare them, you will see what I mean.
I learned something from Dean Malone that has been extremely helpful, and that is using the Price Channel. It has kept me from being stopped out on several occasions. Follow his settings for it and you will see how usefull it is for entering and exiting trades.
Hope this is helpful ...
The following 2 users say Thank You to Zephyr for this post:
Thank you very much for your response...I greatly appreciate it. I have spent MANY hours on ThinkScripter! That is where I found a version (I think) of the TDI. I will go back through his indicators page and see what I can find. Thanks for pointing me in that direction...I always seem to go to the forum only.
I will definitely check out the other indicator you mentioned. Do you run anything else on your charts, in addition to the price channel?
I also use a modification of "Thinkscripter's" SMOOTHED RSI. I color-coded it and combined it with a 3-period RSI, displaced by 1. The usefulness of it lies in it's embeddedness at either Zero or 100. It will help you stay in a trade by simply staying at the extremes when the Stochastic Momentum Index is waving up and down. If you want the code, I'll be happy to post it.
I love indicators, but I've narrowed it down to just a few. To me, the most important ones are Moving Averages, and the indicators which have "overbought" and "oversold" deliniations, such as the RSI and Stochastics.
But by far and away, FIBONACCI is THE WAY TO TRADE! Learn all you can about it. It's NOT perfect, but it's dang close! And a lot of the algorithmic trading today is based upon Fibonacci.
One of the best Fibonacci traders today is David Halsey at Emini Futures, Trading Strategies, Live Emini Trading Room & Trading Videos - Emini Addict. His method is the most superior to any that I've studied. But it's a day-trading method and I'm trying to move into swing trading. I really hate sitting in front of a computer staring at charts. It gets OLD fast! David is an AMAZING guy, and he only charges $30 per month for his trading room. He teaches ALL DAY LONG! It's not a "signal service". It's an educational room using his method. He trades futures only, and he uses NO indicators. I'm not comfortable trading price action only. I will always use the best indicators I can find. Learning his Fibonacci method will be well worth your time spent there.
I forgot to mention that I also use the Darvas Box in TOS for support and resistance, and to mark the swing points. In addition, I found a better version of the PPS that comes with TOS -- written by another great programmer named "KUMOBOB". You can find it by googling 'kumobob PPS". Look at the second link on the page - "SHARE-TOS." I'd provide the link, but this site will log me out if I leave it to copy the link. (the iPad has quirks).
The PPS is almost like a 4/7 MA crossover, but it's a little more complex than that. It is a great entry signal on the larger time frames.
Great Trading To You!!!!
The following user says Thank You to Zephyr for this post:
WOW! Outstanding information! I will first explore the "Stochastic Momentum Index" that you had mentioned earlier instead of the "Traders Dynamic Index". On that note, you had mentioned that the TDI was a messy and hard to read indicator...how so? Dean seemed to have done a great job laying out what makes up the indicator and also provided the entry and exit rules.
I fully concur with your statement about day trading...I had no intention of starring at screens all day either. My main focus was swing trading, and I had done very well at it until March 2011 - that's when it all went to hell! I then turned to day trading the Russell (/TF) and continued to struggle evern more. I feel that I'm finally at a place where I can understand what is happening and act accordingly. I basically came to the realization that I had no idea what the hell I was doing and was merely gambling and getting lucky at it! What a horrible feeling.
I use the exponential moving averages (5/34/89/200), John Carter's TTM indicators, DMI, volume, CCI Average (45, 6, -200, 200), and pivots (for /TF only). I'm trying to avoid the analysis paralysis that can occur with all the spaghetti on the screens, but I have been able to pair several down and was hoping that Dean's TDI was the final piece of my mechanical trading system puzzle, that would allow me to strip down my indicators even more.
I agree that there are many great resources out there. I have been a part of the Stockguy22 chat room for almost 2 years now and they have helped me get through these most difficult times of my trading career...I will be indentured to them for life! I definitely aspire to be an independent trader, but I think we all struggle from time to time and it sure is nice to have other traders to defer to. Where do you spend most of your days? Do you fly solo or are you in a room most days?
So the "Stochastic Momentum Index" keeps you in the trade longer (along with the price channel), and the kumobob PPS gives you a good entry signal on larger time frames (like 5 or 15-min or longer)?
Again, thank you so much for your time and sharing your knowledge and resources. Happy New Year to you and great trading to you as well.
Sorry I didn't get back to you right away. I've been on vacation. I'm just now re-entering the market.
To answer your questions .... please .. just place the TDI and the SMI on the same chart time frame you want to trade on. Examine which is easier to read. That's all I can say about it. I found the TDI to be a sloppy, choppy indicator. I believe the SMI to be more efficient.
I also use ThinkScripter's Smoothed RSI. It's a great indicator to stay in the trend, because the SMI will rise and fall and cause false signals. The SMI will give you an early warning to exit or enter a trend. The Smoothed RSI will help you stay in the trend.
In addition, I coded all of the Moving Averages I use as an indicator on a subgraph, so I can keep my charts clean. Look into GMMA - Daryl Guppy's Multiple Moving Average Indicator. It will help you to plot the MA's without having them clutter your charts.
I also use the standard Linear Regression Channel that came with TOS to mark exit points. And again, I use FIBONACCI and Dean Malone's Price Action Channel to determine entries and exits.
I use a few of THE BEST methods devised to trade with. When I become a superior trader, my indicators might come down to 1 or 2 only. But the ones I use now keep me out of trouble on a consistent basis.
As far as how I spend my days, I don't day trade except on occasion. I'm currently involved in www.forexmentor.com's - Fibonacci Swing Trading Course and Signal Service. They're very good. But I've been able to further screen their recommendations and avoid their cancellations and losses. That's why I believe that PRICE ACTION trading alone can be foolish. When there are indicators that help you assess a potential trade and avoid bad ones ... WHY would you NOT use them???
Anyway, I hope post helps you ...
Last edited by Zephyr; January 14th, 2012 at 12:57 AM.
The following user says Thank You to Zephyr for this post:
I hope your vacation was fantastic...glad to hear you got away. Not sure where you live, but if it is somewhere cold this time of year, I hope your vacation was off to a warm and sunny beachside locale!
I wanted to start off by saing that I don't mean to sound combative or come off as challenging of you and your methods, but the TDI appeared to be something that I've been in search of on my own for over a year now. So to stumble across this indicator and Dean's entry and exit rules - I was blown away.
I will definitely take the time to add-in the indicators you mentioned - I donated to ThinkScripter, so I am a member with full access! Look out! Analysis paralysis coming up! Are there any rules that you stick to with the indicators that you mentioned? What does your screen / set-up look like?
I mentioned before that I am part of the Stockguy22 chat and a few of the guys in there swear by the GMMA indicator - they run Ninja. They use it more for expansion and contraction areas.
In your opinion, what makes these indicators the best? I can only assume that it is from experience, and trial and error!
I'm with you on the day trading thing...I will plan on doing it on occassion, but would much prefer to swing trade. I'm glad you said price action alone can be foolish...I have always felt that there has to be some indicators out there that can keep things simple and paint a picture much quicker.
I presume you use ToS? I apologize, you may have already mentioned this before, but do you trade forex primarily or stocks or futures? I've picked up quite a few things from the forex world...that's obviously how I came across the TDI. I primarily was interested in swing trading stocks, but then dove into ETF's and then futures as the world came crumbling down around me. As I've discovered a few new toys (indicators), I'm looking at focussing my energies back on stocks. And then applying the same methodologies to futures as time permits.
As always, thank you for your time and sharing your experiences and thoughts. Your responses are coming at a time in my trading career where I feel like I have 95% of the puzzle and need to assemble it now and add a few more pieces...and I'm sure a few will also fall off the table.