DV indicator is generally used together with its smoothed difference relative to Welles Wilder’s classic Relative Strength Index (RSI).
Both indicators construct oscillators that compare the current price to historic levels. However, while the RSI strictly employs differences in recent closes, the bounded DV looks at a great array of relationships between daily closes and their high/low ranges, prospectively capturing inherent volatility effects in addition to relative price placement.
How to Use
DV is a sharp oscillating indicator that means it reacts to slight changes in prices. The range is 50 – 0. So when the value reaches and stays at 50, this indicates that the price is rising recently and it is a bullish market.
Similarly when the DV value reaches 0 and remains 0 indicating that the prices are decreasing and there is a bearish market.
Building on Mudrex
Since DV reacts to slight changes in price it is apt that we sell when the prices go up and sell when the prices go down.
- Buy:- DV crosses-down 5
- Sell:- DV crosses-up 45
- TimeFrame:- 1 Day
Creating on Mudrex
Components:- To create this strategy all we need is 2 indicator blocks, one to buy and one to sell.
For Buying, we will use the following settings:-
For Selling, we will use the following settings:-
Running on Binance Futures: BTC/USDT with tick interval of 1D yielded an overall profit of 47%