Direct Answer

+DI and -DI are the positive and negative directional indicator lines inside Wilder's Directional Movement System, and they measure the relative strength of upward versus downward price movement over a lookback period, typically 14 bars. When +DI is above -DI, upward directional movement is dominant; when -DI is above +DI, downward directional movement is dominant, and a crossover between the two lines is often read as a shift in which side controls the trend.

Key Takeaways

  • +DI (positive directional indicator) measures upward directional movement; -DI (negative directional indicator) measures downward directional movement.
  • Both are derived from directional movement (+DM and -DM), which compares each bar's high/low to the prior bar's high/low.
  • +DM and -DM are smoothed using Wilder's method, then divided by smoothed true range (ATR) and multiplied by 100.
  • A +DI cross above -DI suggests upward movement is taking control; a -DI cross above +DI suggests downward movement is taking control.
  • +DI and -DI are typically plotted alongside ADX, which is derived from the difference between them and measures trend strength, not direction.
  • They were introduced by J. Welles Wilder in his 1978 book on directional movement, alongside RSI and Average True Range.
  • Crossovers indicate direction only, they say nothing about how strong the resulting trend will be.
  • Like most trend indicators, +DI/-DI lag price because they're built from a smoothed, backward-looking calculation.

What Are +DI and -DI?

+DI and -DI are the two directional lines at the core of Wilder's Directional Movement System, the same framework that produces the Average Directional Index (ADX). Where ADX answers "how strong is the trend," +DI and -DI answer a different question: "which direction is currently dominant." +DI rises when recent price action has been driven mainly by expanding highs; -DI rises when recent price action has been driven mainly by contracting lows.

The two lines are plotted together on the same 0-to-roughly-50/60 scale beneath the price chart. Their relative position, which line is on top, and by how much, is the signal traders read, more than either line's absolute level.

How +DI and -DI Are Calculated

The calculation starts with directional movement for each bar, comparing the current high and low to the prior bar's high and low:

  • +DM = current high − prior high, but only counted when it is positive and greater than the down-move (prior low − current low); otherwise +DM = 0.
  • -DM = prior low − current low, but only counted when it is positive and greater than the up-move (current high − prior high); otherwise -DM = 0.

+DM and -DM are then smoothed over a lookback period (commonly 14) using Wilder's smoothing technique, and each is divided by the smoothed true range (essentially Average True Range) over the same period, then multiplied by 100:

  • +DI = 100 × (Smoothed +DM ÷ ATR)
  • -DI = 100 × (Smoothed -DM ÷ ATR)

Dividing by true range normalizes directional movement for volatility, so +DI and -DI reflect the proportion of recent price range attributable to each direction rather than raw point moves.

Worked Example (Hypothetical)

Consider a hypothetical stock where, over a 14-day lookback, the smoothed up-moves (+DM) sum to a value that, once divided by the smoothed true range and multiplied by 100, produces a +DI reading of 28. Over the same period, the smoothed down-moves (-DM) produce a -DI reading of 15. Because +DI (28) is above -DI (15), the directional system reads this hypothetical stock as being in a period where upward directional movement dominates. If, in a later hypothetical session, -DI rises to 24 while +DI falls to 20, the lines would cross, and the system would flip to reading downward movement as dominant, a signal some traders would combine with ADX to judge whether that new downward bias also reflects a strengthening trend.

Why +DI and -DI Matter

Trend-following traders need two separate pieces of information: which way price is likely trending, and how strong that trend is. ADX alone only answers the second question, a rising ADX confirms a strengthening trend but says nothing about direction. +DI and -DI fill that gap by identifying which side of the market, buyers or sellers, is currently driving the range. Traders commonly combine a +DI/-DI crossover with a rising ADX as a stronger combined signal than either indicator alone: direction from the crossover, conviction from ADX.

Because +DI and -DI are built from the same smoothed directional-movement data as ADX, they stay internally consistent with it, a trader watching all three lines together is looking at one coherent system rather than three unrelated indicators.

Limitations and Common Mistakes

  • Treating every crossover as a trade signal. +DI/-DI crossovers happen frequently in choppy, range-bound markets, generating false signals; many traders filter crossovers with a minimum ADX level before acting.
  • Confusing direction with strength. A +DI/-DI crossover shows which side is currently dominant, not how strong or durable that dominance is, that's what ADX is for.
  • Ignoring the lag. Like any smoothed, backward-looking calculation, +DI and -DI confirm a directional shift only after it has partly occurred.
  • Using a single fixed lookback across all instruments. The standard 14-period setting was designed by Wilder for the volatility characteristics of the markets he traded; other lookback lengths can behave differently on other assets or timeframes.
  • Reading the lines in isolation from price. +DI and -DI are derived indicators, they should be interpreted alongside the price chart and support/resistance context, not as a standalone system.

Which Side Is Ahead, and Nothing More

+DI and -DI answer one question: over the lookback, has upward or downward directional movement been larger? That is the whole of it. The lines carry no information about how emphatic the difference is, how long it might last, or whether the move is worth trading, which is why Wilder paired them with ADX in the first place. Asking a crossover to tell you about strength is asking the wrong line.

There is a quieter consequence of how they are built. Both are divided by smoothed true range before being scaled, so they express directional movement relative to the bar ranges that produced it. A crossover can therefore occur on a quiet, narrow stretch of chart where price has hardly travelled, because the comparison is proportional rather than absolute. The cross is real; the move behind it may be small.

Before acting, check the state of ADX alongside the cross. Many traders require a minimum reading before treating a crossover as tradeable, precisely because the lines exchange places repeatedly when neither side is in control. Also check the lookback: 14 periods came from the markets Wilder traded in the 1970s, and it is a starting point rather than a property of price.

These are derived lines, two steps removed from the chart. Read them next to the price they were calculated from, with the levels and structure that price has been respecting, rather than as a system that stands on its own.

Frequently Asked Questions

What are +DI and -DI?

+DI (the positive directional indicator) and -DI (the negative directional indicator) are two lines within Wilder's Directional Movement System that measure the strength of upward and downward price movement, respectively, on a scale that is typically plotted from 0 to roughly 50-60. When +DI is above -DI, upward directional movement is dominant; when -DI is above +DI, downward directional movement is dominant.

How are +DI and -DI calculated?

+DI and -DI start from directional movement (+DM and -DM), which compare each period's high and low to the prior period's high and low. +DM and -DM are smoothed over a lookback period (commonly 14) using Wilder's smoothing method, then each is divided by the smoothed true range (ATR) and multiplied by 100 to produce +DI and -DI.

What does a +DI and -DI crossover mean?

A crossover happens when +DI moves above -DI or vice versa. A +DI cross above -DI is commonly read as a signal that upward directional movement has taken over from downward movement, and a -DI cross above +DI is read the opposite way. Crossovers are directional signals, not strength signals, and are frequently used alongside ADX, which measures how strong the resulting trend is.

What is the difference between +DI/-DI and ADX?

+DI and -DI indicate which direction, up or down, has the stronger directional movement, and a crossover between them signals a potential change in that direction. ADX is derived from the difference between +DI and -DI and measures the overall strength of the trend regardless of direction, without indicating which way price is moving.

Who developed +DI and -DI?

+DI and -DI were introduced by J. Welles Wilder as part of the Directional Movement System, described in his 1978 book New Concepts in Technical Trading Systems, alongside ADX and other now-standard indicators such as RSI and Average True Range.

When is directional movement zero?

When neither the current high exceeds the previous high nor the current low undercuts the previous low, which is an inside bar. It is also zero for one side whenever the other side move is larger, because the rule assigns the bar to whichever direction extended further rather than crediting both. Inside bars therefore contribute nothing to either directional indicator, which is part of why they flatten in a consolidation.

Why is directional movement divided by true range?

To normalise it. Raw directional movement is measured in price units, so its size depends on the instrument and on the price level, which would make readings incomparable. Dividing by true range converts it into a proportion of the movement available in that bar, producing a bounded value that can be compared across instruments and across periods with different volatility.

Can both directional indicators fall at the same time?

Yes, and it is the signature of a narrowing range. If successive bars extend less far beyond the previous bar in either direction, both raw directional movements shrink and both indicators decline together. That configuration means neither side is gaining, which is different from one side winning, and it is the case a crossover-only reading of the pair misses entirely.

Is a directional indicator crossover the same as a moving average crossover?

No, and the difference matters. A moving average crossover compares two smoothed price levels, so it fires when the recent average price passes the longer one. A directional crossover compares smoothed measures of how far bars extended in each direction, so it can fire while price levels are unchanged, and it can stay unchanged while price moves steadily in small increments.

References

Disclaimer

This page is for educational purposes only and does not constitute investment, financial, or trading advice. Technical indicators like +DI and -DI reflect historical price behavior and do not guarantee future results. Any chart or example on this page uses illustrative, hypothetical data, not live market data. Swoopr Investment is not a licensed investment advisor; consult a qualified professional before making investment decisions.