DMX (Directional Movement Quality Index) is the ultra-smooth, low lag version of your classic DMI indicator. With DMX on your charts, you can throw away both DMI and ADX.
Formulas :
DMX = (P-M)/(P+M),
Signal = MA(DMX) with [Smoothing_Length] number of periods and [Smoothing_Method] type, where
P - (+DI) mode of ADX indicator,
M - (-DI) mode of ADX indicator.
The classic indicator ADX is a smoothed (and lagging) version of the more basic, and more noisy, DMI indicator. DMI itself is composed of two jittery components,
DMI.up and DMI.down, combined the following way ...
DMI=| DMI.up - DMI.down | / | DMI.up + DMI.down |
Let's create a new signal, called "Bipolar DMI", and let it be the same as the classic DMI formula above, except that the absolute value is NOT applied.
And the bipolar DMI be both positive (duringUupward trends) and negative (during Downward trends). The New formula is ...
Bipolar DMI=( DMI.up - DMI.down ) / ( DMI.up + DMI.down )
