28.07.2019
AAKASHAYA PATRA SEVEN STAR SMART EDUCATION SERIES PART – 18
DMI (Directional Movement Index)
DMI (Directional Movement Index) developed by J.Welles Wilder in
1978 it compose of two lines, one known as DI+ and Second line known as DI- DMI
indicator is very easy to understand, without going in the formula of the indicator
we are focusing how to understand this indicator and how we make a best use of
this indicator while planning a new trade
1) As discussed above it compose of two lines DI+ and DI-
+DM is
the Current High - Previous High.
-DM is
the Previous Low - Current Low.
2) DI+ indicate buying pressure and price is going upward side and
difference between previous high and current high is positive, while DI-
Indicate selling pressure and price is going down ward side and the between
previous low and current low is negative
3) When D+ line cross D- Line from below to above, it indicate that
buying pressure is increase ing and price may go upward side in near future
4) Similarly When D- Line cross D+ line from below to above which
indicate selling pressure is increasing as compare to buying and price may go
down in near future
5) In this indicator, crossover is play an important role to guide
us when to trade, it indicate end of current trend / swing and start of new
trend / swing respectively
6) The distance between DI+ line and DI- Line is indicate strength
of the current trend, if the distance is increasing and lines are getting wider
it indicate strength of respective trend
7) If both the lines are very close to each other and overlapping
each other which indicate low volatility and side ways movement of the market
I hope u all understand this on DMI will be helpful for you to
identify the new developing trend and direction of the price to plan the trade
and the crossover will play an important role for entry or exit.If u want to
watch this with charts then joint our classes and we will make u master on this
indicator.
FOR
MORE SUCH TYPE OF EDUCATION JOINT OUR ONLINE SERIES AND BATCHES AND BE A PRO
TRADER CONTACT ON 7028 421 786.
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