Technical Analysis Challenge Day 4 - DMI
Hi, mooers!
Welcome to the last indicator of the TA challenge - Topic 1. Have you mastered the MA, MACD, and EMA indicators yet? Do you understand the relationship between trend indicators and stock prices by now? Let's move on to the Directional Movement Index (DMI).
Welcome to the last indicator of the TA challenge - Topic 1. Have you mastered the MA, MACD, and EMA indicators yet? Do you understand the relationship between trend indicators and stock prices by now? Let's move on to the Directional Movement Index (DMI).
What can you learn from the DMI challenge?
● How to detect trade signals with DMI
● How to measure strengths and directions of price movements
● How to compare current prices with previous price ranges
● How to detect trade signals with DMI
● How to measure strengths and directions of price movements
● How to compare current prices with previous price ranges
Developed by J. Welles Wilder in 1978, DMI is an indicator that identifies the movement of asset prices. It comprises four lines: PDI, MDI, ADX and ADXR. ADX gives an overview of the trend's strength, while PDI and MDI assess the price action's direction.
1. When ADX is above 25 and PDI is above the MDI, ADX measures the strength of an uptrend. When ADX is above 25 and PDI is below the MDI, ADX measures the strength of a downtrend.
2. The circle marked around Apr 2020 shows that the PDI line crosses the MDI line from below to above, which signals a price increase. The price bars show that the price moves upward after the crossing until Sep 2021. It is also evident that the trend is stronger as the two lines move apart. The second circle of the graph shows the point where MDI crosses the PDI from below, signaling a potential decrease in price.
How to write your post?
Step 1: Select a specific stock
Step 2: Find the DMI indicator on moomoo
Step 3: Read the chart and analyze the price trends
Step 1: Select a specific stock
Step 2: Find the DMI indicator on moomoo
Step 3: Read the chart and analyze the price trends
For example:
I've been keeping an eye on the $xx stock. Now, I'm going to utilize the DMI indicator on moomoo to analyze the stock.
I've been keeping an eye on the $xx stock. Now, I'm going to utilize the DMI indicator on moomoo to analyze the stock.
I selected PDI and MDI indicator lines to be presented in the chart. When the PDI crosses the MDI upwards, it releases a buy signal. If the MDI rises from below 20 to 50, the stock price will have a mid-level decline; if the PDI rises from below 20 to 50, the stock price will have a mid-level rise.
When the PDI is below ADX, ADXR, and MDI simultaneously (especially when it is below 50), it means that the market is still weak, and the downward trend remains unchanged. I will sell stocks on rallies instead of buying stocks.
*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.
Where to post?
Post your learning results by clicking on the discussion: Technical analysis challenge: How do you identify trends with moving averages?
Post your learning results by clicking on the discussion: Technical analysis challenge: How do you identify trends with moving averages?
Attention Please:
Mooers who complete all four tasks can compete for the $AMC Entertainment (AMC.US)$ stock rewards. The links of the former three tasks are as follows:
● Technical analysis challenge day 1 - MA
● Technical analysis challenge day 2 - MACD
● Technical analysis challenge day 3 - EMA
Mooers who complete all four tasks can compete for the $AMC Entertainment (AMC.US)$ stock rewards. The links of the former three tasks are as follows:
● Technical analysis challenge day 1 - MA
● Technical analysis challenge day 2 - MACD
● Technical analysis challenge day 3 - EMA
Disclaimer: Moomoo Inc. ("moomoo") provides mobile and online technology solutions for securities trading. Moomoo is not an investment adviser or a broker-dealer and it provides neither investment or financial advice nor securities trading services. All contents such as comments and links posted or shared by users of the community are opinions of the respective authors only and do not reflect the opinions, views, or positions of moomoo, its affiliates, or any employees of moomoo or its affiliates. Please consult a qualified investment or tax advisor for your personal financial planning and tax situations.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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steady Pom pipi :
NANA123 steady Pom pipi : Wow, comment number one
.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Sit and wait to read your masterpiece
steady Pom pipi NANA123 : I'm here every day.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
NANA123 : Daily study, daily punch![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Happymoooooo : DIM is beautiful and quickly adapt to price movements.
NANA123 : DMI identifies the movement of asset prices. It comprises four lines: PDI, MDI, ADX and ADXR. ADX gives an overview of the trend's strength, while PDI and MDI assess the price action's direction.
Milk The Cow NANA123 : So does it means that the ADX > 25 or < 25 is just measure the strength![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
.
Eg.
ADX < 25 = a possible market trap? (false bullish/bearish?)
NANA123 Milk The Cow : generally speaking, when ADX is above 25 and PDI is above the MDI, ADX measures the strength of an uptrend. When ADX is above 25 and PDI is below the MDI, ADX measures the strength of a downtrend. learn from @Meta Moo![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Milk The Cow NANA123 : erm... so it means that eg. ADX like "10" = does not have enough strength![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
to down trend ![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
even if the PDI below the MDI?
NANA123 Milk The Cow : When ADX=10, it often indicates that the price trend is relatively weak, and it is necessary to be alert to the reversal of the market.
In most cases, in the volatile trend of the market, the ADX cannot reflect the market situation; at the same time, the indicator is based on past data and is difficult to reflect accurately. Therefore, the ADX uses as an additional reference value in stock analysis.
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