WebCab Technical Analysis Web Services for Delphi v1.1

DirectionalMovementIndicator.DirectionalMotionHighLevelVariables Method 

Calculates the Directional Indicator which forms the main part of the Directional Movement System developed by Wellas Wilder.

public double DirectionalMotionHighLevelVariables(
   double plusDirectionalMovement,
   double minusDirectionalMovement
);

Parameters

plusDirectionalMovement
The value of the Plus Directional Movement indicator corresponding to the last two trading periods. See PlusDirectionalMovement for more details.
minusDirectionalMovement
The value of the Minus Directional Movement indicator corresponding to the last two trading periods. See MinusDirectionalMovement for more details.

Return Value

Double value of the Directional Indicator corresponding to the last two trading periods. That is, where the PDM and MDM parameters where both evaluated with respect to the last two trading periods.

Remarks

This indicator is generally evaluated using 14 periods and is used with the PlusDirectionalMovement and MinusDirectionalMovement indicators.

Evaluation

The Directional Movement Indicator can be summarized by the following formula:

Directional Movement Indicator = 100 * ( (PDM - MDM) / (PDM + MDM) ),

where PDM is the Plus Directional Movement (PDM) indicator over the last two trading periods which can be evaluated using PlusDirectionalMovement and MDM is the Minus Directional Movement (MDM) indicator over the last two trading periods which can be evaluated using MinusDirectionalMovement.

Interpretation

The directional indicator has a range of [0,100], where to higher the value returned the stronger the trend is said to be. If a trend is reliable then the smoothed directional lines (PDM and MDM) will diverge and the indicator will increase. If on the other hand a trend starts to fail and price whip-saws (for example with price is within a trading range) the difference between the smoothed direction lines will decrease and the overall index will decrease.

See Also

DirectionalMovementIndicator Class | Indicators Namespace | PlusDirectionalMovement - In order to evaluate the Plus Directional Movement indicator parameter. | MinusDirectionalMovement - In order to evaluate the Minus Directional Movement indicator parameter.