What +DI and −DI represent
+DI and −DI are derived from positive and negative directional movement relative to true range.
When +DI is above −DI, positive directional movement is stronger under the calculation. When −DI is above +DI, negative directional movement is stronger.
What ADX measures
ADX is derived from the relationship between +DI and −DI and is designed to measure trend strength.
ADX itself is non-directional. A rising ADX can accompany either a strengthening uptrend or a strengthening downtrend.
A high or rising ADX describes directional strength. Direction must be determined from +DI/−DI, price structure or other evidence.
Interpreting ADX levels
Traders often use approximate thresholds such as 20 or 25 to distinguish weak from stronger directional conditions, but these are conventions rather than universal laws.
The behavior of the instrument and timeframe should be tested rather than assuming one threshold works everywhere.
DMI crossovers
A +DI cross above −DI indicates positive directional movement has become stronger under the calculation; the opposite cross indicates negative directional movement has become stronger.
In sideways conditions, repeated crossovers can create whipsaws.
Common ADX/DMI mistakes
Calling high ADX bullish
ADX measures strength, not direction.
Using every DI crossover
Choppy markets can generate frequent direction changes.
Ignoring lag
ADX and DMI are calculated from historical price movement and therefore react after movement occurs.
Key takeaways
- +DI and −DI describe directional movement.
- ADX describes trend strength rather than bullish or bearish direction.
- A rising ADX can occur in both rising and falling markets.
- Thresholds such as 20 or 25 are conventions and should be tested.
Sources & further reading
This lesson is educational material. Market structure, exchange rules, fees, margin requirements and derivatives mechanics can differ by venue and can change over time. Verify current rules with the venue you use.