In the December 2021 issue of TASC, John Ehlers introduced an exciting twist on an old favorite: the DMH, or Directional Movement Histogram. This modern take on the traditional directional movement indicator brings a fresh perspective to technical analysis, and it’s about time! For years, traders have relied on directional movement, which was first popularized by J. Welles Wilder. Back then, traders didn’t have the luxury of advanced tech for complex calculations, but Ehlers is here to change that.
While the DMH indicator comes preset with Wilder’s classic 14-bar setting, Ehlers encourages traders to tailor the length to their individual strategy or optimize it based on their trading style. This flexibility allows you to fine-tune your approach, making it a valuable tool in your trading arsenal.
What’s New in This Version?
- Enhanced color changes for clearer signals:
- Color shifts when the slope changes
- Color updates on zero line crossings
- Retained original color settings for consistency
- Use it as Ehlers intended, or leverage the color changes for potential trading signals.
- We recommend doing some testing with the DMH period before implementing it in your trading strategy.
With the DMH indicator, you’re not just following the trend; you’re stepping into a new realm of trading analysis. So, why not give it a shot? Explore its features and see how it can elevate your trading game!
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