Chart Directional Movement

When viewing a historical chart in Telemet Orion users may quickly add Directional Movement (DI+, DI-) or Directional Movement (DX, ADX) by clicking on the Lower Indicators icon within the chart window toolbar. 

Directional Movement (DI+, DI-):

This is a momentum indicator developed by J. Welles Wilder, Jr. Current and previous high, low, and closing prices are compared to measure the magnitude of upside and downside price moves, relative to the "true range." When the difference between today’s high and yesterday’s high is positive, the index displays a positive value on the DM+ curve and zero on the DM- curve, and vice-versa. The more the daily price change approaches or exceeds the true range extremes, the more the indicator curve deviates from the zero line, indicating strong price momentum in the current direction. After the index curves are smoothed for daily price volatility, it is the more positive curve that is used to signal market direction and momentum.

Interpretation: Buy (sell) when DI+ crosses above (below) DI-.

Directional Movement (DX, ADX)

This is a momentum index is used to indicate the magnitude of price directionality. The DX curve indicates the magnitude of change in the DI+ and DI- indicators, and the ADX depicts a smoothed DX. When DX and ADX and are increasing, it is believed prices are exhibiting strong directionality and an appropriate position should be entered. Small DX and decreasing ADX indicate diminishing directionality and provide signals for exiting positions.

Interpretation:  Initiate (exit) positions when ADX is rising (falling).  Expect a reversal of trend when absolute value of difference between DX and ADX becomes large.