DMI — Directional Movement Index

Overview

The Directional Movement Index plots +DI and −DI lines to reveal whether buyers or sellers are in control, and is typically used alongside the ADX to gauge trend strength. DMI excels in trending forex and crypto markets, where clean directional moves produce reliable crossover signals. Integrate DMI into your trading strategies and confirm with volume tools from our indicator guide library.

How It Works

+DI measures upward directional movement and −DI measures downward directional movement, both smoothed over 14 periods by default. The difference between the two lines is normalised and the ADX is derived from that difference. When +DI is above −DI, upward pressure dominates; the reverse signals downward pressure.

Key Signals

• +DI crossing above −DI = bullish directional signal.
• −DI crossing above +DI = bearish directional signal.
• Wide spread between +DI and −DI confirms a strong directional move.
• ADX rising alongside a DI crossover validates trend strength.

Common Mistakes

• Trading DI crossovers when ADX is below 20 — the trend is too weak.
• Confusing DMI with ADX alone — DMI provides direction, ADX only measures strength.
• Not waiting for the crossover candle to close before entering a trade.