What it does
The Directional Movement Index (DMI), created by Welles Wilder, decomposes price movement into upward and downward components to measure trend direction and strength. +DM is the portion of today's high above yesterday's high and -DM the portion of today's low below yesterday's low (only the larger of the two counts per bar); each is smoothed over 14 periods and divided by Average True Range to give +DI and -DI. The ADX line, a smoothed measure of the spread between +DI and -DI, quantifies trend strength regardless of direction.
How to add it
Click Indicators (ƒx) in the header.
Search “Directional Movement Index” and click the result.
Hover its legend row and click the gear to open settings.
How traders use it
- +DI crossing above -DI is a buy-side signal and -DI crossing above +DI a sell-side signal, but only act when ADX confirms a trend.
- ADX above 25 indicates a tradable trend and above 40 a strong one; ADX below 20 marks a rangebound market where DI crossovers should be ignored.
- A rising ADX confirms the current trend is strengthening (whichever DI is on top); a falling ADX warns the trend is maturing even if price is still moving.
- Wilder's extreme point rule: after a DI crossover, enter only when price takes out the high (or low) of the crossover bar, filtering out many false crosses.
Inputs
| Input | Type | Default | Range / Options |
|---|---|---|---|
| DI Length | number | 14 | 1–2000 |
| ADX Smoothing | number | 14 | 1–50 |
Plots & styling
| Plot | Style | Default color |
|---|---|---|
| +DI | line | #2196F3 |
| -DI | line | #FF6D00 |
| DX | line | #FFA726 |
| ADX | line | #F50057 |
| ADXR | line | #ab47bc |
Every plot's color, line width and visibility can be changed on the Style tab. Precision (default 4 decimals), price-scale labels and status-line values are configurable at the bottom of the Style tab.
Tips
- Double-click the plot to open settings directly, skipping the legend hover.
- The pane keeps its height in saved layouts, so size it once and it survives reloads.
- Resize the pane by dragging its divider; collapse it from the legend row when you need the space back.
Watch out for
- Heavy Wilder smoothing makes ADX slow: it often confirms a trend only after much of it has happened and stays elevated after the trend has ended.
- In choppy markets the DI lines whipsaw across each other frequently, and crossovers without an ADX filter lose money.