dTrends indicator is a VertexFX client side indicator that provides entry and exit signals based on trend strength and cyclical analysis.
The dTrends indicator uses a combination of Exponential Moving Average, Bulls and Bears Power indicators and cyclical strength to identify trend reversals. It displays the results of its analysis as entry and exit signals by marking the entry / exit candles appropriately.
The Exponential Moving Average (EMA) is a powerful indicator for identifying the strength of a trends. However, it can be lagging or distorted due to large recent price moves. The Bulls and Bears Power indicator tracks the strength of the bullish against that of the bears. By combining both these indicators, the dTrends indicator provides a better trading system while at the same time reducing lags and whipsaws. It is recommended that this indicator should be used in combination with other indicators like MACD and / or Stochastic Oscillator.
The dTrends indicator is calculated as follows,
a)In the first step we calculate the Exponential Moving Average (EMA) of the input price series specified by TREND_PRICE over the recent EMA_PERIOD.
b)In the second step, we calculate the relative Bulls power, whereby the EMA calculated in (a) is subtracted from the Low of the current candle. A positive (or rising) value implies bullish trend.
c)Likewise, we calculate the relative Bears power, whereby the EMA calculated in (a) is subtracted from the High of the current candle. A negative (or falling) value implies bearish trend.
d)Finally, the Net Bulls-Bears Power is calculated, which is the sum of the relative Bulls power and relative Bears Power.
e)A BUY signal is generated if the current Net Bulls-Bears Power is less than ¬-DIST pips and the previous candle Net Bulls-Bears Power is greater than or equal to zero. A blue dot is displayed at the bottom of the candle.
f)A SELL signal is generated if the current Net Bulls-Bears Power is greater than DIST pips and the previous candle Net Bulls-Bears Power is less than or equal to zero. A red dot is displayed at the top of the candle.
The dTrends indicator displays BUY signals with a blue dot below the candle and SELL signals with a red dot above the candle. Additionally, detailed account and trade information is displayed in the top-left corner of the chart.
a)Enter LONG at the close of the candle when a BUY signal is generated. The stop-loss can be placed below the nearest Swing Low.
b)Enter SHORT at the close of the candle when a SELL signal is generated. The stop-loss can be placed above the nearest Swing High.