Directional Movement Index

The Directional Movement Index is a set of indicators that measure the presence and strength of a trend by comparing the relationship between current price highs and lows with previous ones. It consists of two lines, the positive directional indicator and the negative directional indicator, which signal upward or downward momentum respectively.

When the positive line is above the negative line, the trend is considered bullish, and vice versa. Traders often use this index in conjunction with the Average Directional Index to confirm the strength of the trend.

It helps in identifying the start of a trend and provides early warnings of potential exhaustion. By analyzing these directional movements, participants can better align their strategies with the prevailing market bias.