This product is part of the:DMI OSC Divergence Indicator all-in-one package for Thinkorswim
The price is for the package.
The DMI Oscillator is a technical indicator which uses values of DMI in order to predict miscellaneous sides of market behavior.
Two components of DMI are used in calculation: DI+ and DI-; the DMI oscillator calculates the difference between these components and represents it as both a line and a histogram.
Divergence indicator gives possible reversal signals when there are discrepancies between DMI Oscillator and price movement.
Divergence emerges when price and oscillator indicator move in different directions.
Please note: in order to plot this indicator on both price chart and lower chart, you need to load it in two places. And set mode to "Upper" in Price chart and mode to "lower" in Lower chart. As shown in the following picture.
If you want the same signals on both charts, all parameters have to be consistent on both sides.
This indicator works in any time period and applicable for all securities(Stocks, Futures, Forex, Options,ETF, etc.).
When you use this indicator in minute chart, it's better to set "percent" less than 1, otherwise, lots of signals will be filtered.
If you want to add any feature to this indicator, please send us a Customization request.
How to use:
The purpose of divergence indicator is to point when price trend are moving into opposite direction.
First of all, we need to locate the recent High1 and its DMI Oscillator value within the given range(lenght1).
Secondly, we find the previous High2 and its DMI Oscillator value within the given range(lenght2).
Then we compare the ratio of these 2 Highs and DMI Oscillator values to determine if they meet the percentage you set.
For example, if you set "percent=3", then it will check if High1 is greater than High2 by 3%. If you set "DMI_percent=5" then it will check if DMI Oscillator 1 is less than DMI Oscillator 2 by 5%.
If both percent conditions are met, there will be a red arrow pointing downward.
The indicator will find the recent Low1 and its DMI Oscillator value within the given range(lenght1).
And then it will find the previous Low2 and its DMI Oscillator value within the given range(lenght2).
If you set "percent=1", then it will check if Low1 is less than Low2 by 1%. If you set "DMI_percent=5" then it will check if DMI Oscillator 1 is greater than DMI Oscillator 2 by 5%.
If both percent conditions are met, there will be a green arrow pointing upward.
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