The indicator is drawn as two lines and a histogram:
- TD Index - the trend index;
- Direction - trend direction line;
- Signal - trade direction histogram.
It has two parameters:
- Period - calculation period;
- Applied price - price used for calculations.
Possible interpretation of the indicator
- If the histogram points upwards, buying is preferred; if downwards — selling is preferred.
- The intersection of the TD Index and Direction lines, intersection of Direction and zero, as well as a change in direction can also be a signal to open a position in the direction indicated by the histogram.
- If trading implies opening of counter-trend positions (trading on rollbacks), then a change in the line direction counter to the histogram direction can serve as a signal to open a counter-trend position.