The Directional Movement Index, or DMI, is a valuable tool for assessing stock trends. As stocks tend to only trend about 30% of the time, this indicator can provide valuable insight into market movements. Comprised of three lines - the +DI, -DI, and ADX - the DMI measures upward and downward movement, as well as the strength of the current trend. For instance, if the +DI crosses over the -DI or vice versa, the ADX must be on the rise to confirm the signal. This makes the DMI a reliable and essential tool for any investor.
