Usage and practical skills of dmi index
First, the use of DMI indicators
1. Evaluate the trend strength: DMI indicator can be used to evaluate the trend strength of the market. When the ADX line moves up, it means that the market trend intensity increases, and when the ADX line moves down, it means that the market trend intensity decreases.
2. Identify the buying and selling signals: When the +DI line crosses the -DI line upwards, it indicates that the market is in an upward channel and you can consider buying; When the -DI line goes down through the +DI line, it shows that the market is in a downward channel and can be considered for selling.
3. Trend strategy: When the ADX line moves upward and the +DI line is above the -DI line, it indicates that the market is in an upward trend, and you can consider buying; When the ADX line moves up and the -DI line is above the +DI line, it indicates that the market is in a downward trend and can be considered for selling.
Second, the practical skills of DMI indicators
1. Combined with other indicators: DMI indicators can be combined with other indicators, such as MACD indicators and RSI indicators, to obtain more accurate signals.
2. Applicable to different markets: DMI indicators are applicable to the stock, futures and foreign exchange markets, and can be adjusted and optimized according to the characteristics of different markets.
3. Determine the profit point of stop loss: When trading with DMI indicators, it is necessary to determine the stop loss and profit point to avoid excessive risk and protect profits.
4. Don't rely too much: Although DMI indicators can provide useful information, they are not omnipotent, and need to be combined with other analytical tools and market fundamentals for analysis and decision-making.
In a word, DMI indicator is a commonly used technical analysis tool, which can be used to evaluate the strength of market trends, identify trading signals and formulate trend strategies. When using DMI indicators, we need to master practical skills to improve the accuracy and efficiency of transactions.