DMH: Hann-Windowed Directional Movement Indicator

Summary

The document introduces DMH, John Ehlers’s proposed update to the traditional directional movement indicator. It describes applying Hann windowing to directional movement calculations as a way to modernize an established technical analysis method. The write-up says the default period follows Wilder’s 14-bar convention, while emphasizing that traders can choose another length or optimize it for a strategy.

It also notes that this version offers optional display colors for slope changes and zero-line crossings, alongside a mode without color changes. These visual options may help traders interpret the indicator, but the document does not provide performance tests or evidence that any color transition is a reliable trading signal. It recommends experimenting with the period before use; no asset class, entry or exit rules, or risk controls are specified.

Key ideas

• DMH applies Hann windowing to modernize the traditional directional movement indicator.
• The described default period follows Wilder’s 14-bar setting, but the period can be changed or optimized.
• Optional color modes highlight slope changes or zero-line crossings.
• The document recommends testing indicator periods and does not establish that its visual signals are profitable.

Tags

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