Mastering the Ergodic DTI-Oscillator for Better Trading Strategies

Mike • 2011-07-15 01:53

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Author: Andrey N. Bolkonsky

If you're looking to enhance your trading game, the Ergodic DTI-Oscillator is a must-have tool in your toolkit. This innovative indicator, based on the Directional Trend Index, was popularized by William Blau in his book "Momentum, Direction, and Divergence: Applying the Latest Momentum Indicators for Technical Analysis".

How to Install the Ergodic DTI-Oscillator

Make sure to place WilliamBlau.mqh in your terminal_data_folder\MQL5\Include\
Put Blau_Ergodic_DTI.mq5 in your terminal_data_folder\MQL5\Indicators\

Ergodic DTI-Oscillator by William Blau

Ergodic DTI-Oscillator by William Blau

Understanding the Calculation

The Ergodic DTI-Oscillator is calculated as follows:

Ergodic_DTI(q,r,s,u) = DTI(q,r,s,u)

SignalLine(q,r,s,u,ul) = EMA( Ergodic_DTI(q,r,s,u) ,ul)

Where:

Ergodic_DTI() - This represents the Ergodic Line, derived from the Directional Trend Index DTI(q,r,s,u);
SignalLine() - This is the Signal Line, calculated using EMA(ul) on the Ergodic Line;
ul - The period used for smoothing the Signal Line.

Input Parameters

Graphic Plot #0 - Ergodic Line (Directional Trend Index):

q - The number of bars used in the DTI calculation (default is q=2);
r - The period for the 1st EMA applied to the DTI (default is r=20);
s - The period for the 2nd EMA applied after the 1st smoothing (default is s=5);
u - The period for the 3rd EMA applied after the 2nd smoothing (default is u=3);

Graphic Plot #1 - Signal Line:

ul - The smoothing period for the Signal Line (default is ul=3);

Important Notes

Ensure that q>0;
All values for r, s, and u must be greater than 0. If any of these are set to 1, smoothing will not be applied;
Make sure ul>0. If ul=1, the Signal Line and Ergodic Line will be identical;
Minimum rates should be calculated as: (q-1+r+s+u+ul-4+1).

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