The Dots Trend Indicator and Its Confirmation Rules

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 obtained through a moving-average function and applies the cosine of a price-change angle. Users can adjust the period, input price type, filter, and horizontal or vertical shifts. A longer period is described as increasing lag while reducing false signals; the filter is intended to suppress price surges without adding display delay.

The suggested approach is to wait for two consecutive dots of the same color before entering in the indicated trend direction. The source acknowledges that this confirmation can fail and offers using one dot with a filter set relative to the spread as an alternative. It provides no backtest, performance evidence, or detailed exit and risk rules, so the settings and signal suggestions should be treated as design guidance rather than proof of a profitable system.

Key ideas

• Blue and red dots indicate the indicator’s estimated upward and downward trend directions.
• The calculation uses a selected price input and the cosine of a price-change angle.
• Increasing the period is said to reduce false signals while increasing lag.
• The recommended signal waits for two same-color dots, though the source notes this can fail.
• No performance study or complete trade-management rules are provided.

Tags

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