🔍 Episode 39: The DMI — Know When to Enter & When to Stay Out
Tired of false breakouts? Not sure when a trend is actually strong enough?
The Directional Movement Index (DMI) clears the noise and confirms the power of the trend!
➡️ Keep reading to master a professional-grade indicator most retail traders ignore!
📘 What is the DMI?
The Directional Movement Index (DMI), developed by J. Welles Wilder (creator of RSI), is a system made of 3 lines:
+DI → Measures bullish strength
−DI → Measures bearish strength
ADX → Measures the overall trend strength (not direction!)
Values:
ADX above 25 = Strong trend
ADX below 20 = Weak trend or range
📍 How to Use DMI on Binance (FREE)
✅ Open any chart on Binance Web or App
✅ Click on [Indicators]
✅ Search: DMI or Directional Movement Index
✅ Add it — it’s completely free
🛠️ You’ll see 3 lines: ADX, +DI, and −DI. Focus on the crossovers and ADX value.
🧠 How to Read DMI Like a Pro
✅ +DI crosses above −DI → Bullish signal
✅ −DI crosses above +DI → Bearish signal
✅ ADX rising above 25 → Strong trend confirmed
✅ ADX falling below 20 → Don’t trade trends (market is choppy!)
⚡ Powerful Strategy: DMI + Breakouts
🔹 Buy setup:
→ +DI crosses above −DI
→ ADX is above 25
→ Price breaks resistance ✅
→ Boom! High-confidence trend entry
🔹 Sell setup:
→ −DI crosses above +DI
→ ADX rising
→ Confirm with support break
📌 Bonus tip: Combine with RSI to filter fake signals
⚠️ Mistakes to Avoid
❌ Ignoring the ADX line — it tells you if the market is trending at all
❌ Trading during low ADX — signals during sideways markets are often traps
📈 Pro Tip
Use DMI to confirm breakout trades — especially after big news or volume spikes.
It protects you from entering fake moves that die quickly.
🔥 Pros don’t just look at where the market is going — they ask how strong the move is.
DMI gives you the confidence to ride real trends and skip the noise.
