This indicator and its usage was developed by Brazilian trader and analyst Odir Andrade Aguiar (nickname Didi) from Doji Star.

Usage

It is based on the ratio of moving averages with periods 3 (FAST) and 20 (SLOW) by the 8-period moving, which are default settings.

When SLOW and FAST are very close and near 1.0-line (white center line), they can indicate a buy or sell signal in next candles. Such signal is know as Agulhada (Needleful).

• Buy entry happens when FAST line moves UP while SLOW line moves DOWN with increasing volume, after signal.
• Sell entry happens when SLOW line moves UP while FAST line moves DOWN with increasing volume, after signal.

It is important to mention that:

• references should only be used to start the trade. Other indicators must be used to exit the trade;
• signals work best when stock/futures has high volume and liquidity.