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Learn about the Didi Index, a powerful indicator developed by Odir Aguiar that helps find trend strength, entry/exit points, and market direction. Two methods are discussed for using the indicator, and additional indicators like the Kijun-sen and relative volatility indicator are added to the chart for better trading signals. A profitable strategy is created where the Didi Index provides the signal to buy or sell, the Kijun-sen confirms the trend, and the volatility indicator confirms there is enough volume in the market. Entry conditions for a long or short position are also discussed along with stop-loss and take-profit targets.
The Power of the Didi Index Indicator: How to Use It for Profitable Trading
Introduction:
The Didi Index Indicator was developed by Odir Aguiar, a technical analyst and millionaire trader. It is an indicator based on technical analysis that helps traders find the strength of a trend and potential entry and exit points. Despite its effectiveness, many traders are unfamiliar with the indicator or use it incorrectly. In this article, we will discuss the Didi Index Indicator, how it works, and how to use it in conjunction with other indicators for profitable trading.
Adding the Didi Index Indicator:
To add the Didi Index Indicator to your chart, head over to TradingView and click on the indicator search tab. Search for the Didi Index Indicator (also known as the Brazilian MAC-D), select the indicator made by Everget and add it to your chart. To profit from the indicator, it is crucial to understand its workings. The indicator consists of two lines – the green line is the fast-moving average while the red line is the slow-moving average.
Methods of Using the Indicator:
There are different methods traders can use the Didi Index Indicator. The first involves removing the fast-moving average line and using the red line’s crossing above or below the zero lines as the entry signal. When the red line crosses below the zero line, traders enter a long position. Conversely, when the red line crosses above the zero line, traders enter a sell position. While this method yields profits, many traders receive false and losing signals, and missed trade opportunities due to late signals.
The second method involves using both lines of the Didi Index Indicator and waiting for the green line to cross above or below the red line. This causes a green or red dot to be printed, signaling a buy or sell position, respectively. This is a good method, but traders risk getting false and losing signals and miss out on good trades due to late signals.
Using Other Indicators with the Didi Index Indicator:
To avoid missing good trades and entering into losing positions, traders can add other indicators to their charts. Head over to the indicator search tab and search for the Kijun-sen indicator, select the indicator made by Erwin Backers, and add it to the chart. Then, search for the Relative Volatility Indicator and select the indicator made by Veryfid. Optimize the indicators by changing the settings. Change the Kijun-sen period from 26 to 30 and change its line color to yellow for better visibility. Change the Didi Index settings by changing the short length to 7, medium length to 15, and long length to 30. Finally, uncheck the first 3 filter checkboxes in the Volatility Indicator’s settings.
Combining Indicators for Profitable Trading:
Now that the indicators are optimized, traders can combine them for profitable trading. The Didi Index Indicator will be used as the signal indicator, with the Kijun-sen Indicator as the trend confirmation indicator, and the Volatility Indicator to ensure enough volume in the market to enter the position.
Entering into a Long Position:
To enter into a long position, traders need a bullish crossover signaled by the Didi Index Indicator’s green line crossing above the red line, a bullish trend confirmed by the price trading above the Kijun-sen line, and a bullish volume confirmed by the bar’s green color on the Volatility Indicator crossing above the moving average and filter lines. Once all conditions are met, enter into the long position, with the stop-loss at the recent swing low and the take profit at 1.5 times the risk-to-reward ratio.
Entering into a Short Position:
To enter into a short position, traders need a bearish crossover signaled by the Didi Index Indicator’s green line crossing below the red line, a bearish trend confirmed by the price trading below the Kijun-sen line, and a bearish volume confirmed by the bar’s red color on the Volatility Indicator crossing below the moving average and filter lines. Once all conditions are met, enter into the short position, with the stop-loss at the recent swing high and the take profit at 1.5 times the risk-to-reward ratio.
Conclusion:
The Didi Index Indicator is a powerful tool for traders when used correctly. In combination with the Kijun-sen and Volatility Indicators, it can be used to identify profitable trading opportunities with minimal risk. Ensure to optimize their settings and adhere to strict risk management rules to improve your trading performance.
