Directional Movement Index (+DI and -DI)
The +DI is the percentage of the true range that is up. The -DI is the percentage of the true range that is down. A buy signal is generated when the +DI crosses up over the -DI. A sell signal is generated when the -DI crosses up over the +DI. You should wait to enter a trade until the extreme point is reached. That is, you should wait to enter a long trade until the price reaches the high of the bar on which the +DI crossed over the -DI, and wait to enter a short trade until the price reaches the low of the bar on which the -DI crossed over the +DI.
See also DX, ADX and ADXR.
The DI was developed by J. Welles Wilder and is described in his 1978 book New Concepts In Technical Trading Systems.
Copyright © 2020, FM Labs, Inc.