0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bullish
Gold
Mixed
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bearish
More View more
Real Time News
  • Multiple time frame analysis follows a top down approach when trading and allows traders to gauge the longer-term trend while spotting ideal entries on a smaller time frame chart. Learn how to incorporate multiple time frame analysis here: https://t.co/HnzQcAXWLU https://t.co/A517hC0JAG
  • Take a closer look visually at the most influential global importers and exporters here: https://t.co/1G7CRsegRX https://t.co/jBFhVRWLyy
  • Copper prices seem to have stalled just shy of key chart resistance as geopolitical tensions weigh on the global-growth proxy. Get your copper market update from @ddubrovskyFX here:https://t.co/qseySE5dWP https://t.co/u0HoA9tVvz
  • The #Euro may pay the price for the EU’s stance on its digital sovereignty while the US Dollar eyes closely-scrutinized US fiscal stimulus talks. Get your $EURUSD market update from @ZabelinDimitri here:https://t.co/Ga3DdHod7j https://t.co/Mfhb5iqLF6
  • The Indian Rupee struggled to benefit from an unexpected RBI rate hold as the Nifty 50 inched closer to invalidating a bearish reversal signal. What is the road ahead for USD/INR? Find out from @ddubrovskyFX here:https://t.co/Zjiay6hQWT https://t.co/TvedUlvwxd
  • While the balance sheet did not set higher highs US initial jobless claims fell to their lowest since the middle of March If you invert jobless claims, it set a higher high alongside #SP500 #FoodForThought ahead of the weekend, and have a good one! https://t.co/n6SaEdnpMi https://t.co/AKNYNlUa4l
  • Copper prices seem to have stalled just shy of key chart resistance as geopolitical tensions weigh on the global-growth proxy. Get your copper market update from @ddubrovskyFX here:https://t.co/qseySE5dWP https://t.co/zuQMaDqScY
  • When is a 1.76 million jobs added to the US economy underwhelming? When it is still 12.88 million jobs from the pre-pandemic level and economists warn the subsequent gains are going to slow sharply... https://t.co/IUMBsiGYYC
  • The New Zealand Dollar may extend its surge from yearly lows as it tentatively signals a cyclical upturn. NZD/USD, NZD/JPY rates poised for further gains. Get your market update from @DanielGMoss here: https://t.co/vrOuFkvWpX https://t.co/wKbQNFAZbn
  • The US Dollar is testing key support levels against the Singapore Dollar, Malaysian Ringgit, Philippine Peso and Indonesian Rupiah following persistent losses. Get your #ASEAN currencies market update from @ddubrovskyFX here: https://t.co/qqYDELqydd https://t.co/nh7SspnIzF
Learn Forex: How to Trade with DMI

Learn Forex: How to Trade with DMI

2012-12-13 19:00:00
Walker England, Forex Trading Instructor
Share:

Article Summary: The EURGBP has recently tested resistance after a 250 pip advance. As the pair stalls traders can turn to DMI to find the prevailing trend.

The primary objective of a Forex trader is to find market direction. There are a variety of methods for finding the trend however interpreting price action can often be difficult and sometimes misleading. To help ease in this process traders often will employ the use of technical indicators.

In todays example we will be looking at the EURGBP daily chart pictured below. The pair has advanced as much as 394 pips from its July 23 low. However, resistance has been met near its October high at .8164. So what is a trader to do in present markets? Which direction is the EURGBP trending? To answer these questions, we will tae a closer look at the DMI indicator.

Learn Forex – EURGBP Daily Trend

Learn Forex: How to Trade with DMI

(Created by Walker England)

The DMI indicator is derived from two lines, the positive directional movement indicator (DMI+) and the negative directional movement indicator (DMI-). Both lines run in a range between 0-100 to help identify if a currency pair is trending up or down. The DMI + line is depicted as a green line and as its name suggests helps track price in an uptrend. The DMI - line is depicted as a red line and measures the strength of a downtrend. Traders will watch both lines as they oscillate between 0-100 and change their market preference as one line crosses above the other.

Reading DMI is relatively straightforward. Traders will look for the DMI line that is moving higher than the other. This is also known as the dominant DMI line. In the chart below, DMI + has crossed above DMI - , making it the dominant DMI line and suggesting that the trend is up. If DMI – was the dominant line the opposite would be true. Traders would then conclude that the market was intending to move lower.

Learn Forex – EURGBP with DMI

Learn Forex: How to Trade with DMI

(Created by Walker England)

Using DMI my preference is to look for continued strength on the EURGBP. This will continue as long as DMI + remains above DMI -. One way to trade this market bias is to look for breakouts toward higher highs. If DMI + increases in value, traders may look to employ a trending strategy as

An alternate scenario includes price moving to higher highs. If this occurs traders will be notified as the DMI - line will cross back above DMI +.

Next: What is the Number One Mistake Forex Traders Make? (24 of 50)

Previous: Trading the Rate of Change Indicator

---Written by Walker England, Trading Instructor

To be added to Walker’s e-mail distribution list, CLICK HERE and enter in your email information.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.