Directional Movement Index (DMI)

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Directional Movement Index (DMI)

The Directional Movement Index (DMI) is actually a collection of three separate indicators combined into one. Directional Movement consists of the Average Directional Index (ADX), Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI). DMI's purpose is to define whether or not there is a trend present. It does not take direction into account at all. The other two indicators (+DI and -DI) are used to complement the ADX. They serve the purpose of determining trend direction. By combining all three, a technical analyst has a way of determining and measuring a trend's strength as well as its direction.

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