DislikedI've searched extensively through this thread, but I'm still really confused regarding backtesting using the TDI.
While using the Strategy Tester the TDI is painted at the beginning of each candle. This value appears to be for the previous candle. This is also what I believe I'm seeing live, when a new bar appears. The TDI represents the previous candles movement, and I would make my trading decision based on that.
However, when I scroll to the left on any chart to do manual backtesting, the TDI values appear to be for the current candles....Ignored
However reality is less beautiful. I'm using Ninjatrader which has a Market Replay function. I replayed last Friday 12-02. At 3PM GMT+1, all three amigos started to rapidly move down on H1 timeframe.
However, at the open of the 3PM GMT+1 candles, green was merely touching red, not crossing it (see "2. Replay situation at 3PM GMT+1.PNG").
At the open of the 4PM GMT+1 candles there were confirmed TDI crosses (see "2. Replay situation at 4PM GMT+1.PNG").
In this particular case, the trade on the second red candle down still went on to 100+ pips (I actually closed it at TDI hooking which resulted in "just" 80 pips).
In other cases you might be too late in the game since the move up or down may have taken place mostly in the first candle.
After all, TDI is a lagging indicator just like all the other indicator.
Therefore I think Dl4hao has a point by saying that forward testing is the best way to find out if TMS will be profitable for you.
Backtesting however can make you familiar with detecting good TDI crosses, when to take them / not to take them, exits, etc.
Financial independence is what I live for