The Wilders DMI Oscillator Metatrader 4 forex indicator is a technical indicator that reveals the strength of a trend, which can be either up or down.
Wilder stated that a trend is present when the ADX is above 25.
The values of the Wilders DMI Oscillator are known to range between 0 and 100.
The indicator is made up of light blue and orange lines that are wrapped within a separate window, alongside histograms that are either colored lime or tomato.
The histograms are also seen to either fall below or above the 20 level.
When the histograms of the Wilder’s DMI Oscillator stay above the 20 level, a very strong trend is said to be present.
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Indicator Chart (EUR/CHF M30)
The EUR/CHF M30 chart below displays the Wilders DMI Oscillator Metatrader 4 forex indicator in action.
Basic Trading Signals
- Buy Signal: Go long when the light blue line of the Wilders DMI Oscillator indicator stays above the orange line and the histograms are filled lime.
- Sell Signal: Go short when the light blue line of the Wilders DMI Oscillator indicator stays above the orange line and the histograms are filled tomato.
- Exit buy trade: Close all buy orders while a bullish trend is ongoing, the light blue and orange lines of the Wilders DMI Oscillator intersect.
- Exit sell trade: Close all sell orders while a bearish trend is running, the light blue and orange lines of the Wilders DMI Oscillator cross.
- Tips: When the lime and tomato-filled histograms grow beyond the 20 level, price is said to be in an extremely strong bullish and bearish trend in that order.
MT4 Wilders DMI + Trend Predictor Scalping Strategy
This strategy uses the Wilders DMI Oscillator MT4 Indicator together with the Trend Predictor v1.0 MT4 Indicator.
The DMI Oscillator shows a histogram: green bars mean bullish trend strength, red bars mean bearish trend strength.
The Trend Predictor gives clear entry arrows: blue for buy, red for sell.
By combining the two, this strategy aims to enter trades when trend strength and entry signals align, which is ideal for short-term scalping on fast charts.
This method is most effective on lower timeframes such as M1, M5, or M15.
It fits scalpers who want quick, directional trades while minimizing the noise by filtering with trend momentum.
Buy Entry Rules
- The Wilders DMI histogram must be green, indicating a bullish trend.
- The Trend Predictor must generate a blue arrow (buy signal).
- Enter a long position when a blue arrow appears and the DMI histogram is green or rising.
- Place the stop loss just below the most recent swing low on the chart.
- Set a take profit target equal to 1 to 1.5 times your stop loss risk, or consider an early exit if the DMI histogram weakens (turns red or shrinks significantly).
Sell Entry Rules
- The Wilders DMI histogram must be red, indicating a bearish trend.
- The Trend Predictor must produce a red arrow (sell signal).
- Enter a short position when the red arrow appears and the DMI histogram is red or increasing in strength.
- Place the stop loss just above the most recent swing high.
- Set take profit at 1 to 1.5× risk, or exit early if the DMI histogram starts turning green or losing strength.
Advantages
- The DMI histogram gives real-time strength of the trend, helping avoid weak or fake moves.
- The Trend Predictor provides precise entry points, reducing guesswork.
- Scalping on low timeframes allows many opportunities per session.
- Risk is well defined with stop loss and take profit rules.
- The strategy works on many forex pairs because both indicators are generic and not pair‑specific.
Drawbacks
- In ranging markets, the DMI histogram may oscillate, producing false confirmation.
- Tight stop losses may be triggered often if the market makes quick counter moves.
- The strategy requires quick execution and discipline due to fast timeframe trades.
- Scalping can be mentally tiring, especially if many trades are taken in a session.
- If the DMI histogram flips too quickly, exits may be suboptimal or late.
Example Case Study 1
On the EUR/GBP M5 chart, the DMI histogram turned green, signaling rising bullish momentum.
Shortly afterward, the Trend Predictor plotted a blue arrow.
A long trade was initiated at the close of that bar, with the stop loss set just below the recent swing low.
Because the DMI histogram remained green and strong, the trade moved in favor quickly.
A take profit was reached at 1.2× risk, locking in a solid scalp move.
Example Case Case Study 2
On AUD/USD M1 during the London session, a red DMI histogram bar appeared, followed by several strong red bars, showing bearish strength.
The Trend Predictor then printed a red arrow, confirming a sell opportunity.
A short position was taken, with a stop loss placed just above the swing high on the chart.
As the pair declined, the DMI histogram persisted in red, and the trade was closed at 1.5× risk, capturing a sharp downward move.
Strategy Tips
- Focus on sessions with good liquidity (e.g., London or New York) to get stronger DMI signals and better execution.
- Ignore Trend Predictor arrows if the DMI histogram is weak or neutral because trend strength validation is key.
- Use a small position size for scalping to manage the higher frequency of trades.
- If the DMI histogram starts to fade or reverse, consider exiting early rather than waiting for full take profit.
- Backtest the strategy on a demo account with different currency pairs (e.g., USD/JPY or GBP/CHF) to find where it works best.
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Download the “wilders-dmi-oscillator.ex4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart window indicator
Customization options: Variable (MA_Length, DMI_Length, ADX_Length, ADXR_Length, ADXMode, ADXRMode, VisualMode), width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: trend | oscillator
