mrtools wrote: Thu Nov 19, 2020 9:33 am
Looks like Mladen already did a mt4 version.
You also did a nice version too brother!
naluvs01 wrote: Thu Nov 19, 2020 5:31 pm
I did some coding and added it
Good on you Nal! Looks good to me mate. Nailed it!
For your collection, here is also a "Smoothed" version with MTF upgraded by Mrtools! And as you may know, the author of the SDI, James Sibbet also stated that this is a good tool for Divergences. So of course, Mrtools even upgraded this version with his Divergences Pack
It could do with a little code optimization but this is a neat version.
Let's use this opportunity to recap on the SDI, too. For traders who are new to this tool, here's a description on how it's used:
Sibbets Demand Index
Overview
The Demand Index combines price and volume in such a way
that it is often a leading indicator of price change. The Demand
Index was developed by James Sibbet.
Interpretation
Mr. Sibbet defined six "rules" for the Demand Index:
- A divergence between the Demand Index and prices
suggests an approaching weakness in price.
- Prices often rally to new highs following an extreme peak
in the Demand Index (the Index is performing as a
leading indicator).
- Higher prices with a lower Demand Index peak usually
coincides with an important top (the Index is performing
as a coincidental indicator).
- The Demand Index penetrating the level of zero
indicates a change in trend (the Index is performing as a
lagging indicator).
- When the Demand Index stays near the level of zero for
any length of time, it usually indicates a weak price
movement that will not last long.
- A large long-term divergence between prices and the
Demand Index indicates a major top or bottom.
Example
The following chart shows Procter & Gamble and the Demand Index. A long-term bearish divergence occurred in 1992 as prices rose while the Demand Index fell. According to Sibbet, this indicates a major top.
Calculation
The Demand Index calculations are too complex for this book (they require 21-columns of data).
Sibbet's original Index plotted the indicator on a scale labelled
+0 at the top,
1 in the middle, and
-0 at the bottom. Most computer software will make a minor modification to the indicator so it can be scaled on a normal scale.