Minus Directional Indicator (14)
The Minus Directional Indicator (14) is a trend indicators indicator used in Skyrexio Strategy Builder for trend strength measurement and direction identification.
Introduction
The Minus Directional Indicator (-DI) is a bearish trend strength indicator that measures the strength of downward price movement. -DI is primarily bearish - it provides SHORT signals when values are high and rising, indicating strong downward momentum. This indicator is essential for confirming bearish trends and measuring the conviction behind downward price movements.
How Minus Directional Indicator (14) Works
-DI was developed by J. Welles Wilder Jr. as part of the Directional Movement System. It measures the strength of downward price movement by analyzing negative directional movement relative to the Average True Range (ATR). The calculation involves smoothing negative directional movement over 14 periods and dividing by ATR to create a normalized measure of bearish momentum.
Key characteristics of -DI:
• Bearish momentum measurement - Quantifies the strength of downward price movement • Relative strength indicator - Compares negative directional movement to volatility • Trending vs ranging identification - High -DI values indicate strong downward trends • Directional bias confirmation - When -DI > +DI, bearish bias is confirmed • Momentum acceleration detection - Rising -DI indicates strengthening bearish momentum
Key Characteristics
Category
Trend Indicators
Type
Bearish Trend Strength Measurement
Primary Use
SHORT entries and bearish trend confirmation
Timeframe
All timeframes supported (1m to 1M)
Confirmation
ADX, volume, momentum indicators
Strategy Applications
🔴 SHORT STRATEGY (Primary Use)
-DI is primarily a SHORT signal indicator. Use SHORT entries when -DI is high and rising, especially when -DI > +DI, indicating strong bearish momentum and downward trend strength.
Base Entry Order (SHORT)
Additional Entry Orders (SHORT)
Take Profit Orders (SHORT)
Stop Loss Orders (SHORT)
🟢 LONG STRATEGY (Secondary Use)
-DI is not naturally suited for LONG strategies as it measures bearish momentum. Use LONG entries only when -DI is very low, indicating weak bearish momentum, and combine with strong bullish confirmations.
Base Entry Order (LONG) - Weak bearish momentum
Additional Entry Orders (LONG) - Not recommended
Additional entries not recommended for LONG strategy using -DI. Use bullish indicators like:
Take Profit Orders (LONG) - Exit existing positions
Stop Loss Orders (LONG) - Protect existing positions
Advanced Strategy Combinations
Multi-Timeframe -DI Analysis
Higher Timeframe Confirmation:
Daily: -DI > +DI (bearish bias established)
4H: -DI rising + ADX > 25 (strong bearish momentum)
1H: -DI execution signals + volume confirmation
SHORT: Daily/4H -DI dominance + 1H -DI crossover above +DI Scaling: -DI rising with ADX expansion Exit: -DI falling below +DI or extreme oversold
-DI Momentum Breakdown Strategy
Risk Management Guidelines
Position Sizing
SHORT Strategy
Standard
-DI > +DI with ADX > 25
LONG Strategy
Reduced (25-50%)
-DI very low, use bullish confirmations
High -DI
Increase confidence
-DI > 30 shows very strong bearish momentum
Low -DI
Reduce size
-DI < 15 indicates weak bearish momentum
-DI Reliability Factors
✅ -DI clearly above +DI ✅ -DI rising with ADX > 25 ✅ Volume confirms bearish momentum ✅ Multi-timeframe -DI alignment
❌ -DI close to +DI (unclear dominance) ❌ -DI falling despite being above +DI ❌ Low ADX (ranging conditions) ❌ Conflicting momentum indicators
Best Practices
For SHORT Strategies
Wait for -DI > +DI - Confirm bearish momentum dominance before entering
Rising -DI preferred - Enter when -DI is increasing (strengthening momentum)
ADX confirmation - Combine with ADX > 25 for trending conditions
Volume validation - Ensure bearish moves are supported by volume
For LONG Strategies
Very low -DI only - Only consider LONG when -DI < 15 (very weak bearish momentum)
Strong bullish confirmation - Require multiple bullish indicators for LONG entries
Quick exits - Take profits fast when -DI shows any bearish recovery
Tight stops - Use very close stops due to counter-trend nature
Common Mistakes to Avoid
Ignoring +DI - Using -DI without comparing to +DI for directional bias
Fighting strong -DI - Going LONG when -DI shows strong bearish momentum
No ADX confirmation - Trading -DI signals without trend strength confirmation
Volume neglect - Ignoring volume confirmation for -DI signals
Market Conditions Analysis
Strong Downtrend
🟢 High (-DI > +DI, rising)
🔴 Very Low (against momentum)
Weak Downtrend
🟡 Medium (-DI > +DI, flat)
🟡 Medium (if -DI very low)
Ranging
🟡 Medium (-DI/+DI oscillating)
🟡 Medium (mean reversion)
Uptrend
🔴 Low (-DI < +DI)
🟢 High (weak -DI confirms bulls)
High Volatility
🟡 Medium (confirm with volume)
🟡 Medium (higher risk)
Related Indicators
Conclusion
Key Takeaways
PRIMARY USE: SHORT entries when -DI > +DI (bearish momentum dominance)
SECONDARY USE: Bearish momentum confirmation and trend strength measurement
ALWAYS: Compare -DI to +DI for directional bias and confirm with ADX
REMEMBER: -DI measures bearish momentum - use bullish indicators for LONG strategies
Success with -DI requires understanding its bearish nature and using it primarily for SHORT strategies. Always compare -DI to +DI for directional bias and confirm with ADX for trend strength before entering positions.
Last updated