DMI technical indicators
Actually, I don't really understand DMI indicators, thank you @Meta MooIt gave me an opportunity to recognize and learn about these technical indicators. Next, let's learn together:
The DMI indicator is a medium- to long-term stock market technical analysis method.
About the method of using the DMI indicator: The basic usage description of the system: When the market trend is obvious, the indicator works best. PDI (ascending line) MDI (descending direction line) ADX (trending average)
1. The PDI line broke through the MDI line from the bottom up, indicating that new bulls have entered the market, which is a buying signal.
2. The PDI line fell below the MDI line from top to bottom, indicating that new bears have entered the market, which is a signal to sell.
3. When the ADX value continues to be higher than the previous day, the market will maintain the original trend.
4. When the ADX value decreases, falls below 20, and moves horizontally, the market atmosphere consolidates.
5. When the ADX value changes from an upward trend to a downward trend, it indicates that the market is about to reverse.
Parameters: N statistical days; M interval days, generally 14, 6
Hmm, have you learned it?![]()
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Let's do it in action, I chose to use it here $Berkshire Hathaway-B(BRK.B.US$
1. Note that the PDI line in the green grid on the chart has broken through the MDI line from the bottom up, indicating that new bulls have entered the market. This is a buying signal. At this point, you can see that the stock price is rising.
2. Conversely, you can see that the PDI line has fallen below the MDI line from top to bottom in the red grid on the chart, indicating that new bears have entered the market. As a signal to sell, the stock price is falling at this time.
3. When the ADX value continues to be higher than the previous day, the market will maintain the original trend. Observe that the ADX value in the green grid on the chart is gradually rising, and the upward trend is being maintained at this time.
4. Notice the red grid in the chart. When the ADX value changes from an upward trend to a downward trend, it indicates that the market is about to reverse, and the stock price is falling at this time. As the ADX value declines, falls below 20, and moves sideways, the stock price is consolidating.
The DMI indicator is a medium- to long-term stock market technical analysis method.
About the method of using the DMI indicator: The basic usage description of the system: When the market trend is obvious, the indicator works best. PDI (ascending line) MDI (descending direction line) ADX (trending average)
1. The PDI line broke through the MDI line from the bottom up, indicating that new bulls have entered the market, which is a buying signal.
2. The PDI line fell below the MDI line from top to bottom, indicating that new bears have entered the market, which is a signal to sell.
3. When the ADX value continues to be higher than the previous day, the market will maintain the original trend.
4. When the ADX value decreases, falls below 20, and moves horizontally, the market atmosphere consolidates.
5. When the ADX value changes from an upward trend to a downward trend, it indicates that the market is about to reverse.
Parameters: N statistical days; M interval days, generally 14, 6
Hmm, have you learned it?
Let's do it in action, I chose to use it here $Berkshire Hathaway-B(BRK.B.US$
1. Note that the PDI line in the green grid on the chart has broken through the MDI line from the bottom up, indicating that new bulls have entered the market. This is a buying signal. At this point, you can see that the stock price is rising.
2. Conversely, you can see that the PDI line has fallen below the MDI line from top to bottom in the red grid on the chart, indicating that new bears have entered the market. As a signal to sell, the stock price is falling at this time.
3. When the ADX value continues to be higher than the previous day, the market will maintain the original trend. Observe that the ADX value in the green grid on the chart is gradually rising, and the upward trend is being maintained at this time.
4. Notice the red grid in the chart. When the ADX value changes from an upward trend to a downward trend, it indicates that the market is about to reverse, and the stock price is falling at this time. As the ADX value declines, falls below 20, and moves sideways, the stock price is consolidating.
Advantages: DMI takes into account the magnitude of daily fluctuations to more accurately reflect the trend of quotes and better predict future developments and changes in quotes.
Disadvantages: The DMI cross signal is slower than other indicators in indicating market trends, so this indicator is more suitable for medium- to long-term investors and is not recommended for short-term investors. Sometimes, even though the ADX indicator has turned, the stock price continues to rise, and there is no reversal.
This is just my personal opinion. Everyone is welcome to discuss it together.![]()
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Disadvantages: The DMI cross signal is slower than other indicators in indicating market trends, so this indicator is more suitable for medium- to long-term investors and is not recommended for short-term investors. Sometimes, even though the ADX indicator has turned, the stock price continues to rise, and there is no reversal.
This is just my personal opinion. Everyone is welcome to discuss it together.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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