Wilder's Directional Movement (DX)

Wilder's Directional Movement (DX)

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Wilder's Directional Movement (DX)

Variable List Abbreviation: DX

 

Variable Mode(s): Stock, Futures1, and Futures2

[ Note: appears in indicator list only after high and low selected ]

 

Parameter(s): DX factor

 

Description:

Indicates the presence of trends in the market.  Positive values indicates a possible upward trend, while negative values indicate a possible downward trend.  Increases in the values over time indicates a tendency towards a stronger upward trend, while decreases in the values over time indicates a tendency towards a stronger downward trend.

 

Calculation:

Plus Directional Movement (PDM) = abs(high - previous high)

Minus Directional Movement (MDM) = abs(low - previous low)

 

if ( high < previous high ) and ( low > previous low )

PDM and MDM are set to zero

                            otherwise if PDM = MDM then both set to zero

                            otherwise the smaller of the two is set to zero

 

True Range (TR) is the largest of the following

absolute value of ( high - low )

absolute value of ( high - previous close )

absolute value of ( low - previous close )

 

Plus Directional Indicator (PDI) = Exponential Moving Average of PDM

                                              Exponential Moving Average of TR

 

Minus Directional Indicator (MDI) = Exponential Moving Average of MDM

                                                 Exponential Moving Average of TR

 

Directional Movement (DX) = PDI - MDI

                                PDI + MDI