The DMI bot places deals based on the DMI and ADX indicators.The Directional Movement Index is a technical indicator used to determine descending and ascending trends in the market. The indicator includes two directional indexes and is normally used together with the Average Directional Index. Thus, the DMI is displayed in the form of three lines.
How to set up the DMI bot
- Set up the timeframe for your DMI bot.
- Set up the length (of the DI+, DI-).
- Set up the length of ADX.
- Set up the limit value for ADX. By reaching this value, a buy signal will be generated.
The DMI consists of two directional indexes: The Plus Direction Indicator (DI+), and a Minus Direction Indicator (DI-). When the DI+ line is above the DI- line, the trend if bullish. When the DI- line is above the DI+ line, the trend is bearish. When lines cross repeatedly, a side price movement is observed with stable prices.
The DMI indicator also includes the third line called the Average Directional Index. It is a relative strength index to the trend indicated by DI+ and DI-.
The ADX above 25 indicates a strong trend, and the ADX below 20 indicates a weak or side trend. A buy signal is generated when DI+ crosses DI- from below, and the ADX is above 25. A sell signal is generated when DI- crosses DI+ from below.
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