Market Direction Indicator by Donald Lambert was described in the article "The Market Direction Indicator Anticipating Moving Average Crossovers" of "Stocks & Commodities" magazine.
The indicator has five input parameters:
- Fast MA period - fast MA calculation period
- Slow MA period - slow MA calculation period
- Cutoff in points - "cutoff area" - filter of minor price fluctuations (in points)
- Show below zero - display negative indicator values in the area below zero (oscillator)
- Applied price
Rising indicator values mean a bearish trend, while falling ones mean a bullish trend, the values included into the +/- Cutoff range are considered neutral.
Fig. 1. Market Direction Indicator
Fig. 2. Market Direction Indicator as an oscillator
