Plus Directional Indicator [PDI]

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The Plus Directional Indicator function determines the momentum of positive changes that contribute to the overall price trend. 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 Plus Directional Indicator is primarily an exponential moving average of the change in the High price divided by an exponential moving average of the True Range. However, the change in the High price is interpreted as zero during certain conditions relative to the change in the Low price. Usage ----------- The Plus Directional Indicator determines the momentum of positive changes that contribute to the overall price trend. It can also be considered to measure the percentage of price changes involved in a upward trend. An entry/exit system can be created based on when the Plus Directional Indicator crosses the Minus Directional Indicator. See the sample entry/exit systems for example of using the Directional Indicators in an entry/exit system. Source ------------ This indicator was developed by J. Welles Wilder and presented in his book "New Concepts in Technical Trading Systems".