Trend Direction and Force Index for Identifying Trend Strength

Summary

The Trend Direction and Force (TDF) indicator is presented as a normalized measure ranging from -1 to 1, intended to show trend direction and strength. Its calculation compares two smoothed moving-average series, combines their separation with the cube of their average change, then normalizes the result against the highest absolute reading over a lookback window. The indicator is displayed as a histogram around zero.

The accompanying interpretation treats readings near zero as consolidation and uses levels around 0.05 and -0.05 as rough signals. A strong reading is described as generally above 0.6 in magnitude, with positive and negative values indicating opposite directions. A brief move below the signal threshold is treated as possible weakening, while staying below it for at least two bars may suggest a shift toward sideways movement. These thresholds are described as arbitrary, and the source provides no backtest or evidence of predictive reliability. A falling reading is also said to indicate fading momentum, so the indicator is best regarded as a heuristic requiring independent evaluation.

Key ideas

• TDF is a normalized histogram intended to indicate trend direction and strength on a scale from -1 to 1.
• Its calculation combines the gap between two moving-average series with the cube of their average change.
• Readings close to zero are associated with consolidation, using approximate thresholds around 0.05 in either direction.
• The text treats readings above 0.6 in magnitude as generally strong and interprets declining values as weakening momentum.
• The suggested thresholds are arbitrary and are not supported by reported backtest results.

Tags

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