Components - REDline

REDline has two primary components - the REDline and the Choppiness Line.

REDline

REDline is a custom built indicator used by DROID to both identify high-probability trade entires and to use as a general market trade filter. The indicator monitors market volatility, and compares this to recent market price movements, in order to evaluate the strength of a prevailing trend.

REDline is a trend identifier. It is NOT a reversal indicator. Zero line crosses are NOT indications of a 'bottom'. REDLine is best used as an additional trade CONFIRMATION within your existing trade systems. No indicator should be solely relied upon for trade entries and exits.

Note: A trend is the general direction of the price movement of an asset and can be identified by a pattern of higher highs (HH) and higher lows (HL) for a bullish trend or lower highs (LH) and lower lows (LL) for a bearish trend.

Additional comments

Indicative use

• Crossovers (from <0 or under grey Chop-zone to above 0) consider long trade trigger

• Crossunders (from >0 or above grey Chop-zone to below 0) consider short trade trigger

• Consider exiting positions, or tightening SL, when REDline moves into chop-zones

• If using Choppy Market Filter ignore trades in red zones. Yellow can be taken with additional confluence. Green are highest probability entries

To increase the probability of trade signals users should consider prevailing market strucutre.

• If a bullish trend is established and REDline is persisting below 0 - assume this is signaling bullish weakness

• If a bearish trend is established and REDline is persisting above 0 - assume this is signaling bearish weakness

• Trade probability can be increased by looking for lower timeframe entries that agree with its direction at the higher timeframe

Use this indicator at your own risk.