-
How to use the Directional Movement Index
The Directional Movement Index is a great technical tool that helps you see the direction of the market and whether the market is making gains or losses. That’s easy, you say – what’s the point of that? Well, the Directional Movement Index (DMI) lets you see the rate of change. This makes it very useful for showing a few things: When the pace of gains is slowing, When the rate of gains has peaked and is starting to reverse. In summary, the DMI can help you spot a trend reversal early. Here is how it works. The DMI calculation. The DMI is calculated this way. It is a lengthy explanation, so follow this link for ... (full story)
