Directional Movement Indicator

Trading Discussion
1

Is the Directional Movement Indicator (+DI/-DI and something called ‘ADX’) applicable to forex? Is it thought to be useful and helpful in forex trading?

I’m thinking of situations in which one is trying to identify a trend as clearly as possible when a market has been ranging but might be becoming “trendy”. Is the DMI helpful at such times? To what sort of indicator(s) is it an alternative?

Would be grateful for any thoughts/opinions, please!

2

The ADX is a volatility indicator not a directional indicator. It won’t tell you which direction things are going but it will tell you that they ARE going (somewhere). In a training class I attended it was stressed that the ADX should be at 40 or higher to confirm a trend.

It was also stressed that this is a confirming indicator. Everyging looks good for a trade but the ADX is at 10…? No trade.