A Volume-Weighted Directional Index with Signed Trend Strength

Summary

This indicator adapts the Directional Movement Index by smoothing positive and negative directional movement with weighted moving averages, then calculating a signed oscillator from their difference relative to their sum. The positive and negative DI lines show which side is pushing price movement; the oscillator is positive when positive DI dominates and negative when negative DI dominates. Unlike conventional ADX presentation, this version allows the trend-strength line to extend below zero to show bearish dominance.

Users can optionally weight movement and true range by volume, choose area or column plotting, round oscillator values to chosen increments, and set a reference level for strong trends. The author suggests reading DI crossovers together with the reference level and using other confirmation methods and longer timeframes. The page offers a conceptual comparison with classic DMI/ADX but no quantified performance test. Weighted averages, volume weighting, and the shorter suggested settings may change responsiveness, so signals require independent evaluation.

Key ideas

• The oscillator’s sign reflects whether positive or negative directional movement dominates.
• Weighted moving averages emphasize more recent directional movement in the calculations.
• Volume weighting is an optional modification to the directional movement and true-range inputs.
• Oscillator rounding and an adjustable trend threshold provide alternate displays and filters.
• The author recommends confirming signals with other methods and the broader trend.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.