Dots Indicator for Price-Based Trend Direction

Summary

The Dots indicator marks trend direction on a price chart: blue dots represent an uptrend and red dots a downtrend. Its calculation uses a selected price series, such as the close or typical price, and a cosine-based measure of the angle of price change. Although the implementation uses a moving-average function to obtain the chosen price input, the document says the indicator calculation is not built from standard platform indicators.

The main input is the period length. A longer length increases lag while reducing false signals, according to the description. A filter can suppress price surges without adding display lag, while deviation and shift adjust the plotted position. The suggested approach is to wait for two consecutive dots in the same direction before entering with the trend; the author acknowledges that this can fail and offers a filtered single-dot alternative. No formula details, backtest, markets, or risk controls are supplied, so these suggestions should be treated as unverified signal ideas.

Key ideas

• Blue and red dots indicate upward and downward trend direction, respectively.
• The calculation uses a selected price input and a cosine-based price-change angle.
• Increasing the period length adds lag while reportedly reducing false signals.
• The suggested entry waits for two consecutive dots pointing in the same direction.
• The document acknowledges signal failures and provides no backtest or risk-management rules.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.