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| Directional Movement Index (DMI) |
| Directional Movement Index (DMI) is used for identifying a definable trend of a security, that is, it tells whether it is trending or not. The scale for the DMI is from 0 to 100. |
There are three components:
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The average directional movement index (ADX) is a moving average of the DMI. The ADX is a derivation of two separate indicators known as direction momentum indicators (+DI and -DI). |
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Positive Directional Index (+DI), the average of difference between today's High and pervious Close of 14 periods. When the +DI is sloping upward, it is a signal that the up-trend is getting stronger. |
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Negative Directional Index (-DI), the average of difference between today's Low and previous Low of 14 periods. When the -DI is sloping upward, it is a signal that the strength of the downtrend is increasing. |
Figure: A DMI chart of Hang Seng Bank
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Chart Guide
