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Dynamic Momentum Index (DMI) Indicator

The Dynamic Momentum Index (DMI) indicator was developed by Tushar Chande and Stanley Kroll.  DMI measures volatility.  If the underlying asset is volatile, DMI increases its own volatility.  DMI, like RSI is considered overbought at readings of 70 or more and oversold at reading of 30 or less.  DMI is considered a leading indicator since it can be ahead of RSI by a couple of bars when it reaches overbought or oversold levels.  DMI can be used to confirm trends and trade with them.  For example, a steady and consistent decrease in the price of the asset coupled with higher lows could be a sign to short sell the lower high on the DMI.

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Dynamic Momentum Index (DMI) Developer Help