DMI ADX Indicator
The DI (also known as DMI or DM) is a trend indicator. With a trend indicator you the trend direction and strength of the trend and observe changes in the trend direction signal.
The DI consists of 3 (head-) components. The basis of the indicator is the location of the + DI (Plus Directional Indicator) and the-DI (Minus Directional Indicator) relative to each other. Crossings are buying and selling signals. The difference between the two indicators is also shown as a separate line. The level of the ADX (Average Directional Movement) indicates the strength of a signal from the DI.
DMI ADX Indicator Signals
Crossovers
When the + DI line crosses the-DI line up is a buy signal and when the + DI line crosses the-DI line downwards, this is a sell signal.
To reach the acted with the DI not the victim of a sawing motion and the number of trades to reduce the "extreme point rule" be applied. The extreme point is a crossing over the + DI-DI, the high of the day and at a crossing below the + DI-DI the low of that day. The extreme point is then used as an entry point. If the price that extreme point or not checked, then an entry is not useful.
ADX
The value of a DI signal is also often associated with the height of the ADX assessed. A sale is interesting at ADX (R) above 20. Since it is under the use of the DI as a trend indicator can not be sufficiently profitable. An exception is a clear upward bewgeing of ADX. The ADX is described separately.
Distance + DI and-DI
If the distance between the DI +, and Di-the larger, indicating that an increasing power of the trend. If the lines are moving towards each other, there is a weakening of the trend.
Calculation
= DI + + DM / TR, DI = DM-/TR with
TR = max [abs (High-Low), abs (High SlotVorigeDag), abs (Low-SlotVorigeDag)]
DM + = max [0; High HoogVorigeDag]
DM = max [0; LaagVorigeDag-Low]
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Forex is simple follow the trend and you will rich.
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