Directional Movement Index

Directional Movement uses a rather complicated set of calculations designed to rate the directional movement of commodities or futures on a scale from 0 to 100. For futures strategies which traders employ trend-following methods, commodities or futures rating in the upper end of the scale would be attractive. Those using non-trending methods, commodities or futures rating at the lower end of the scale should be considered for trading. At its most basic, the Directional Movement would affect trading in the following manner: Long positions would be taken when the "+DI" line crosses over the "-DI" line. Short positions would be taken when the "-DI" line crosses over the "+DI" line. Further components of this index are the ADX and ADXR lines.

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