ADX Directional Movement Index DMI [Directional Movement Index] is indicator that indicates trend in force and power of the general market price movements. The higher DMI [scale 0-100] the potential to move the market price trend when it's appropriate. This indicator consists of three lines: ADX, + DI and-DI: • IN indicate motion + ² flat ride; • IN indicate the motion of flat-down ²; • ADX [average directional movement index] indicate the strengths and weaknesses of a trend, and a limit of resistance / support from a certain market price movements. From the chart above example, the position signal breakout DMI and ADX are formed. It should be noted and is known to signal a breakout that occurred in the area 25 can be ignored given the frequent "false signals". Buy and Sell Signals indicated during the crossing between the + DI and + DI, the standard period for this indicator is 10 or 14 days [can be adjusted to advance trader]. Welles Wilder Jr. says, DMI must be combined with ADX as a filter. • Rising [up] ADX line means the price the market is trending | volatile; • Falling [down] ADX line means the market price was slow | non-trending | Sideways. Generally traders use the ADX as a trend indicator to use is greater than 20-25 as the beginning of a trend, and smaller than 40 is the point of saturation of a particular trend. And rising again more than 20 is the new trend after the reversal. Interpreting ADX • Under 20: Non-trending markets; • crossing above 20: Signal to be formed; • Between 20 & 40: If the ADX moves up between 20 and 40 then, a confirmation of the prevailing trend was stronger. Buy | Sell Signal adjusted. • Above 40: a strong trend; • crossing at up 50: the trend is very strong; • crossing at up 70: "Power Trend"; rarely formed. Read Signal: A Buy Signal If +DI Cross Upper –DI; A Sell Signal If +DI Cross Under –DI. Note: Breakout occurs on the + | - Expected serve as early warning, the entry is valid only when the following conditions are met. 1. ADXline must be between + |-DI; 2. Avoid entry when the ADX below 25 [absolute] How to read ADX when in a state sideways? Welles Wilder Jr. Says some rules for knowing Buy|Sell signal in whipsaw condition known as Extreme Point Rule : +DI Upper –DI=> extreme high point; +DI Under –DI=> extreme low point. When the next breakout above Extreme Point the buy signal is formed, if the new breakout otherwise under Extreme Point then sell signal is formed.