The Directional Movement System is a fairly complex indicator developed by Welles Wilder and explained in his book, New Concepts in Technical Trading Systems.

Most indicators have one major weakness - they are not suited for use in both trending and ranging markets. The key feature of the Directional Movement System is that it first identifies whether the market is trending before providing signals for trading the trend.

Directional Movement System measures the ability of bulls and bears to move price outside the previous day's trading range. The system consists of three lines:

• The Positive Direction Indicator (+DI) summarizes upward trend movement;
• The Negative Direction Indicator (-DI) summarizes downward trend movement; and
• The Average Directional Movement Index (ADX) indicates whether the market is trending or ranging.

If you are asking me if I trade using the ADX and DMI for trend direction, the answer is no.

I trade on the 15m chart but look at the 1 hour chart for trend direction. The simplest way I have found to determine trend is to look at what side the macd is in relationship to its signal line. The only problem with this is that it does not tell me when their is no trend. In fact when their is no trend the macd will usually wipsaw back and forth through the signal line. Does anybody have a better way to detect the trend in higher time frames?

Thanks, Steven