DMI/ADX (trend indicators): calculation and reading

DMI uses +DI and −DI to measure the strength of the upward and downward directions, and ADX measures trend strength without regard to direction.

Updated：2026-11-08

Calculation (default 14 days)

1. Directional movement: how much higher today’s high is than the previous day’s (up move), and how much lower today’s low is than the previous day’s (down move); only the larger of the two, and only if positive, counts, and the other is recorded as 0.
2. Apply Wilder smoothing to the “up move” and the “down move” separately, then divide each by ATR and multiply by 100 to get +DI (upward direction) and −DI (downward direction).
3. DX = |+DI − −DI| ÷ (+DI + −DI) × 100, and applying Wilder smoothing to DX gives ADX.

How to read it

• +DI above −DI means the recent upward force is larger; the reverse means the downward force is larger.
• ADX only measures whether there is a trend, regardless of up or down: the higher the value, the clearer the trend; a low value means price is leaning toward sideways movement. Common reference values are 20 to 25, used only to describe levels of strength.
• The thresholds of the “ADX” condition on the Screener page can be adjusted.

Limits

All three lines come from moving-average style smoothing, so they lag; in a sideways market +DI and −DI cross often. It does not predict the future.

Where the idea comes from

DMI and ADX were introduced by J. Welles Wilder Jr. in 1978. This article explains them in our own words.

This article only explains the calculation and how to read a chart. It is not investment advice.