Directional Movement Index [DX]

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The Directional Movement Index function determines the strength of the current price trend by comparing the positive movement to the negative movement. Parameters ------------------ Close         The closing price of the security for each given day. High          The high price of the security for each given day. Low           The low price of the security for each given day. Period        The number of bars of data to include in the calculation, including the current value.                   For example, a period of 3 uses the changes for the current bar and the two previous bars. Note that while this function is intended for use with these specific values, any values can be used for these parameters, including other price values and averaged prices. Function Value ------------------------ The Directional Movement Index is equal to the difference between the Plus and Minus Directional Indicators over their sum. This value is then multiplied by 100, yielding a value between 0 and 100. The higher the value, the more that the movement in either the Plus or Minus direction contributed to the value, indicating a stronger directional trend. Usage ----------- The Directional Movement Index determines the strength of current price trends by comparing negative and positive price movements. The closer the value is to 100, the more that the price is moving primarily in one direction. The closer the value is to 0, the more that the price is remaining around a constant trading price. Source ------------ This indicator was developed by J. Welles Wilder and presented in his book "New Concepts in Technical Trading Systems".