Replies to post #180 on THE BULL & BEAR

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Part Two:
DMI is used to confirm price action (see Figure 2). The +DMI generally moves in sync with price, which means that the +DMI rises when price rises, and it falls when price falls. It is important to note that the -DMI behaves in the opposite manner and moves counter-directional to price. The -DMI rises when price falls, and it falls when price rises. This takes a little getting used to. Just remember that the strength of a price move up or down is always recorded by a peak in the respective DMI line.

Reading directional signals is easy. When the +DMI is dominant and rising, price direction is up. When the -DMI is dominant and rising, price direction is down. But the strength of price must also be considered. DMI strength ranges from a low of 0 to a high of 100. The higher the DMI value, the stronger the prices swing. DMI values over 25 mean price is directionally strong. DMI values under 25 mean price is directionally weak

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The Bull and Bear Weekend Article Focus By:


By Candy Schaap

Candy Schaap and husband, Dr. Charles B. Schaap are a trading team. He is the author of the book "ADXcellence - Power Trend Strategies". Candy started her career hedging futures for a large corporation and has 25 years of trading experience in futures, options, stocks and bonds. She does consulting, lecturing and writes financial articles. She publishes the ADXcellence Trade Letter and mentors the TraderDoc "Loot Camp".