Weighted Directional Movement Index

2월 8일

The Weighted Directional Movement Index (Weighted-DMI) is an enhanced version of the traditional DMI indicator that incorporates various weighting methods to adjust how +DI and -DI are calculated. This allows traders to refine trend detection based on volume, volatility, or price position within Bollinger Bands.

The indicator can be used on any asset and any timeframe, making it versatile for stocks, forex, crypto, and commodities.

How to Use This Indicator:
Trend Reversals → When the blue line (+DI) crosses above the orange line (-DI), it signals a potential bullish trend.
Bearish Trend Shift → When -DI (orange) crosses above +DI (blue), it indicates a possible bearish trend.
Pullback & Re-Entry → If the lines briefly touch or converge and then separate again, it suggests a pullback and potential trend continuation.

This version of DMI allows you to apply different weightings to the trend calculation, helping filter out noise and improve accuracy.

1️⃣ Weighting Methods:
Users can select from multiple weighting options to refine trend detection based on different market conditions:

✅ None (Default DMI Calculation)

Uses the standard +DI and -DI values with no modifications.
✅ Volume Weighting

Adjusts DMI based on traded volume.
Higher volume days increase the weight of the directional movement, making strong-volume moves more impactful.
✅ Volume Delta Weighting

Uses a basic volume delta approximation ((close - open) * volume).
If the price closes higher, upward moves are weighted more.
If the price closes lower, downward moves get greater weighting.
This method can help highlight aggressive price movements with strong participation.
✅ ATR Ratio Weighting (Volatility-Adjusted)

Adjusts DMI based on how today’s ATR compares to its average ATR.
If volatility is higher than usual, the DI values are boosted, helping emphasize strong trends.
If volatility is low, weighting is reduced, helping avoid false signals in quiet markets.
✅ Bollinger Band Position Weighting

Adjusts DI values based on how far price is from the Bollinger Band midpoint.
If price is above the middle band, +DI is amplified and -DI is dampened (bullish bias).
If price is below the middle band, -DI is amplified and +DI is dampened (bearish bias).
This method is useful for mean-reversion strategies and identifying breakouts from Bollinger Band squeezes.

How This Can Be Useful for Traders:

Trend Followers can use crossovers (+DI/-DI) to confirm trend direction shifts.
Swing Traders can watch for pullbacks and re-entries when the lines touch and diverge again.
Volatility-Based Traders may prefer ATR Ratio weighting to emphasize trends during high-volatility conditions.
Breakout Traders might benefit from Bollinger Band weighting, identifying when price moves away from a consolidation zone.
Volume-Based Traders can use Volume or Volume Delta weighting to prioritize trends with strong participation.

Alerts Included
🚨 Bullish Trend Alert: Triggered when +DI crosses above -DI
🚨 Bearish Trend Alert: Triggered when -DI crosses above +DI

Indicator is much more accurate compared to the traditional Directional Movement Index if you apply the weighting. I personally find the Bollinger Band and then Volume weighting highly useful.
The indicator gives signals a lot earlier compared to other indicators, whilst remaining as accurate as possible.
Higher times frame such as the 15 minute and 1 hour I find work best.

2월 8일

릴리즈 노트

🔹 Key Additions:
✅ New checkbox: "Use Heikin-Ashi Calculation"
✅ When enabled, the indicator calculates +DI/-DI using Heikin-Ashi values
✅ When disabled, it uses standard price data (default)
✅ All existing features (weighting methods, trend detection, alerts) remain unchanged