Trend Direction Force Index: Overview of the Popular Trend Indicator in Forex Trading
The Trend Direction Force Index (TDFI) is an indicator widely used among overseas currency traders. It is used as a trend following indicator, helping to determine a market trend and identify strong support and resistance levels. The indicator does not indicate entry or exit points, but only helps to define the current situation on the market. Developed by Alexander Elder, the TDFI is based on the calculation of three technical indicators, namely, the Moving Average Convergence/Divergence (MACD), the Relative Strength Index (RSI) and the Commodity Channel Index (CCI).
The Formula Behind the Trend Direction Force Index
The formula behind the TDFI is based on the calculation of the three indicators as follows: Step One – Calculate the EMA of the three indicators. Step Two – Calculate the relative strength between the EMA and the corresponding indicator. Step Three – Calculate the Average Directional Movement of the Relative Strength. The resulting TDFI value can take a positive or negative value, from -1 to +1 respectively.
How to Use the Trend Direction Force Index
When the TDFI value reaches a positive or negative value near “1”, it indicates that there is a strong momentum in the price movement and traders should enter long or short positions, depending on the direction, when the indicator line returns to zero. When the line sits between -0.5 and +0.5, there is usually a weak trend on the market. It is important to remember that TDFI signals should be used in combination with other technical analysis methods to best identify potential market moving opportunities.
Overall, the TDFI is a powerful tool for traders looking to identify trends and establish potentially profitable positions. By combining the TDFI with other technical analysis strategies, traders can access previously misidentified market movements and increase their profits.
What is the Trend Direction and Force Index MT5 Forex Indicator?
The Trend Direction and Force Index (TDFI) MT5 forex indicator is an oscillator-based technical indicator that predicts activities in the market, such as trend breakouts and short-term trends. This forex indicator is an excellent tool for forex traders who are looking to enter and exit trades based on the movements of the market. TDFI combines data from both the positive and negative increments in order to give an accurate indication of market conditions.
How Can the Trend Direction and Force Index MT5 Forex Indicator Help You?
The Trend Direction and Force Index MT5 Forex indicator is an essential tool for any trader that wants to successfully identify market ranges, short-term trends and trend breakouts. This indicator also helps to identify changes in the level of momentum, which can allow traders to enter and exit trades at the most advantageous times. The trend direction force index can be used on most currency pairs, indices, or commodities.
Advantages of Using the Trend Direction and Force Index MT5 Forex Indicator
The TDFI MT5 indicator provides a wealth of important trading information. By utilizing TDFI, traders can make educated decisions about possible entry and exit points. Additionally, traders should be aware of the fact that the TDFI is especially useful when predicting trend breakouts. This indicator also helps to identify changes in the level of momentum, which can help traders make wise decisions about when to enter or exit trades. Finally, the TDFI MT5 forex indicator is free to use.
In conclusion, the Trend Direction and Force Index MT5 Forex Indicator is an invaluable tool for traders who want to identify trends and momentum changes in the market. This indicator provides traders with a wealth of important data, such as trend breakouts and short-term trends, which can ultimately help traders make informed decisions when entering and exiting trades. Moreover, this indicator is free to use, allowing traders to access it without a cost.
