Directional Movement Index - DMI

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DEFINITION of 'Directional Movement Index - DMI'

An indicator developed by J. Welles Wilder for identifying when a definable trend is present in an instrument. That is, the DMI tells whether an instrument is trending or not.

INVESTOPEDIA EXPLAINS 'Directional Movement Index - DMI'

The scale for the DMI is from 0 to 100. The average directional movement index (ADX) is a moving average of the DMI.

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RELATED FAQS
  1. What are common trading strategies when using the Directional Movement Index (DMI)?

    The directional movement index, or DMI, is a useful momentum indicator for assessing price direction and trend strength. ... Read Full Answer >>
  2. Why is the Directional Movement Index (DMI) important for traders and analysts?

    J. Welles Wilder Jr. created the directional movement index (DMI) to identify whether or not a security is trending. DMI ... Read Full Answer >>
  3. How do I use the Directional Movement Index (DMI) for forex trading?

    The directional movement index, or DMI, is a momentum indicator use to determine the existence of a trend and trend strength, ... Read Full Answer >>
  4. How can I build a trading strategy based on the Aroon indicator?

    One of the primary goals of technical market analytics is to identify performance trends in individual securities or indexes. ... Read Full Answer >>
  5. How does a swing trader use the stochastic oscillator?

    The stochastic oscillator is a momentum technical indicator used to indicate points of possible price reversals. Swing traders ... Read Full Answer >>
  6. How can I spot trading opportunities looking at year-to-date (YTD) performance?

    Trading opportunities on the long side can be spotted by looking at stocks with the worst year-to-date (YTD) performance, ... Read Full Answer >>
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