The methods used for DMI indicators: PDI (rising direction line), MDI (falling direction line) and ADX (trend average line). The PDI line breaks through the MDI line from bottom to top, indicating that there are new bulls entering the market, which is a buying signal; The PDI line falls below the MDI line from top to bottom, indicating that a new short position has entered the market, which is a selling signal; When the ADX value continues to be higher than the previous day, the market will maintain its original trend; ADX value drops below 20, and the market atmosphere is consolidation when moving horizontally; When the ADX value changes from an upward trend to a downward trend, it indicates that the market is about to reverse.

PDI and MDI are always intertwined, and in most cases will fluctuate within the range of 040. These two curves are symmetrical about 20. PDI counts the strength of many parties, and MDI counts the strength of empty parties. Therefore, PDI is above MDI, showing that many sides are stronger than the empty side; PDI is lower than MDI, which shows that the empty side is stronger than the multi-side.

First, the basic principle of DMI index is to find out the role of stock price in the process of rising and falling, judge the long and short power, and then find the equilibrium point of buyers and sellers and the periodic process of stock price fluctuation under the interaction of both parties. In most indicators, different analysis data are calculated according to the trend of daily closing price and cumulative ups and downs, but the disadvantage is that the fluctuation range between daily high and low points is ignored. For example, the two-day closing price of a stock may be the same, but the fluctuation range on one day is not large, and the fluctuation range of the stock price on the other day is above 10%, so the analytical significance of the market trend in these two days is definitely different, which is difficult to show in most other indicators. DMI index takes into account the amplitude factor of daily fluctuation, so as to reflect the market trend more accurately and better predict the future development and changes of the market.

Secondly, DMI index is a set of technical analysis tools that Master Wilde thinks is more successful and practical. Although its calculation process is complicated, the application of technical analysis software can make investors save the complicated calculation process, concentrate on mastering the true meaning revealed by indicators and understand its unique function of judging the market. Different from other technical indicators, the kinetic energy of DMI indicators is mainly to identify market trends. In application, the judgment of DMI index mainly focuses on two aspects. On the one hand, it analyzes the relationship between the rising index +DI, the falling index -DI and the average trend index ADX, on the other hand, it judges the trend and turning characteristics of the market. Among them, the trend relationship between +DI and -DI curves is a signal to judge whether it can be bought or sold, and ADX is a signal to judge the future market development trend.