Thursday, June 14, 2007
Technical Indicators
Directional Movement Index (ADX)
Read More...Directional Movement helps determine if a security is "trending." Developed by Welles Wilder and explained in his book, New Concepts in Technical Trading Systems, it can be used either as a system on its own or as a filter on a trend-following system.
Two lines are generated in a DMI study, +DI and -DI. The first line measures positive (upward) movement and the second number measures negative (downward) movement. A buy signal is given when the +DI line crosses over the - DI line while a sell signal is generated when the +DI line crosses below the - DI line.
Two lines are generated in a DMI study, +DI and -DI. The first line measures positive (upward) movement and the second number measures negative (downward) movement. A buy signal is given when the +DI line crosses over the - DI line while a sell signal is generated when the +DI line crosses below the - DI line.
