Wilders Directional Movement System with EMA
The Welles Wilder's Directional Movement System is an indicator that helps you gauge the strength market’s trend irrespective of whether it is an uptrend or a downtrend.
The strategy here involves combining the Directional Movement System (as measured by DI+ and DI-) with 13 and 21 day EMA. The strategy prompts a signal when two conditions satisfy –
1) 13 period exponential moving average (EMA) on closing basis crosses over 21 period EMA and
2) 14 period of directional indicator positive crosses over 14 period of directional indicator of negative
Additional notesCrossover = Refers to a simple crossover
EMA = Exponential Moving Average
DIP = Directional indicator positive
DIN = Directional indicator negative.
Both DIP and DIN are predefined functions in Tradescript.