DMI index is a technical index that provides the basis for judging the trend by analyzing the changes of the equilibrium point of buyers and sellers in the process of gold price rise and fall, that is, the changes of the strength of both long and short sides are affected by price fluctuations, and there is a cyclical process from equilibrium to imbalance.
DMI itself contains +DI, -di, DX and ADX indicators, which should be coordinated. Except, with other external indicators to judge together.
The fluctuation range of DI is between 0 and 100. Many forces are strong, and the value of +DI is enlarged and close to 100, and the price of gold may continue to rise. On the other hand, if the empty side is stronger, the value of -di will be enlarged and close to 100, and the price of gold will continue to fall. If +DI becomes smaller and approaches 0, it reflects that the momentum of many parties is weakened. If -di becomes smaller and tends to 0, it reflects the weakening of empty momentum. The stock index will stop rising and falling respectively. Investors can find out the strength of long and short positions according to the changing trend of +DI and -di, and take timely actions.
From the analysis of relative strength, if -di is greater than +DI, the graph shows that the +DI line runs through the -di line from bottom to top, reflecting the strengthening of various forces in the gold market, and the price of gold may go higher. Therefore, investors should buy and sell quickly, instead of property hoarding, which will cause losses after the gold price peaks and falls. If +DI is greater than -di, the graph shows that the -di line penetrates the +DI line from bottom to top, reflecting that the gold market bears are entering the market and the price of gold may go down. Therefore, investors should be short and look at the bottom to do more. If the +DI and -di lines cross and the amplitude is not wide. It shows that the gold market has entered a consolidation market. Investors should observe for a period of time and stand by for action.
For DX, investors should pay attention to the fact that DX's activity range is 0- 100. If DX tends to 100, it means that one party's strength tends to zero. If the DX value is large, it means that the strength of the two sides is very different; If the DX value is small, it means that the strength of the two sides is close. If DX tends to zero, it means that the strength of both sides is roughly equal. Generally speaking, the DX value is between 20 and 60, indicating that the strength of both sides is roughly equal, and it is very likely to rotate the main position. At this time, it is easy for investors to grasp their position, seize opportunities, turn short into long, or vice versa. The DX value is above 60, indicating that the long and short sides are pulling apart, and the long and short sides are gradually taking the initiative, or oversold or overbought. The DX value exceeds 20, indicating that the strength of both parties is balanced, and both parties have voluntarily retired, and the business is not alive. In both cases, investors should neither be too impatient nor too cautious. They should take advantage of the opportunity, be bold and cautious.
If the DX and DI values rise at the same time, it shows that the bulls are strengthening and the market has upward momentum. Investors should buy quickly and sell quickly. If the DX and DI values fall at the same time, it means that the main force of the empty side enters the market, and the market decline is inevitable. After investors sell quickly, wait until a new bottom is formed before buying. If the DX line falls above the +DI line, it shows that although the market is rising, it is time to end the rising market, and investors can no longer blindly chase after it. If the DX line falls above the ——DI line, it means that although the market is falling, the bottom of the decline has been formed, and the bear market will end, so investors can do more appropriately.
* buying and selling principles *:
Buy when crossing -DI.
Sell across DI.
When it goes down above 50, it represents the end of the market trend.
4. When ADX falls below _+DI, it is not appropriate to enter the market for trading.
5. When the ADXR is between 20 and 25, it is appropriate to take the reaction secret of TBP and CDP as the trading reference.