Plus Directional Indicator (14)

The Plus Directional Indicator (14) is a trend indicators indicator used in Skyrexio Strategy Builder for trend strength measurement and direction identification.

Introduction

The Plus Directional Indicator (+DI) is a bullish trend strength indicator that measures the strength of upward price movement. +DI is primarily bullish - it provides LONG signals when values are high and rising, indicating strong upward momentum. This indicator is essential for confirming bullish trends and measuring the conviction behind upward price movements.

How Plus Directional Indicator (14) Works

+DI was developed by J. Welles Wilder Jr. as part of the Directional Movement System. It measures the strength of upward price movement by analyzing positive directional movement relative to the Average True Range (ATR). The calculation involves smoothing positive directional movement over 14 periods and dividing by ATR to create a normalized measure of bullish momentum.

Key characteristics of +DI:

• Bullish momentum measurement - Quantifies the strength of upward price movement • Relative strength indicator - Compares positive directional movement to volatility • Trending vs ranging identification - High +DI values indicate strong upward trends • Directional bias confirmation - When +DI > -DI, bullish bias is confirmed • Momentum acceleration detection - Rising +DI indicates strengthening bullish momentum

Market Psychology: +DI reflects the market's bullish conviction and upward momentum. High +DI values indicate strong buying pressure and sustained upward movement. When +DI is greater than -DI, it shows bulls are in control and upward momentum is dominant.

Key Characteristics

Attribute	Details
Category	Trend Indicators
Type	Bullish Trend Strength Measurement
Primary Use	LONG entries and bullish trend confirmation
Timeframe	All timeframes supported (1m to 1M)
Confirmation	ADX, volume, momentum indicators

Strategy Applications

🟢 LONG STRATEGY (Primary Use)

+DI is primarily a LONG signal indicator. Use LONG entries when +DI is high and rising, especially when +DI > -DI, indicating strong bullish momentum and upward trend strength.

Base Entry Order (LONG)

Trigger Type: Once per bar close
Bar TF: 1H
First Condition: Plus Directional Indicator (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Minus Directional Indicator (14)
Timeframe: 1H

Additional Entry Orders (LONG)

Additional Entry 1: +DI rising (strengthening bullish momentum)
First Condition: Plus Directional Indicator (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H

OR

Additional Entry 2: Strong bullish momentum with trend confirmation
First Condition: Plus Directional Indicator (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 25

AND

First Condition: Average Directional Index (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 25

Take Profit Orders (LONG)

Rule 1: Exit condition - Bullish momentum weakening
First Condition: Plus Directional Indicator (14)
Timeframe: 1H
Operator: Cross Below
Second Condition: Minus Directional Indicator (14)
Timeframe: 1H

OR

Rule 2: Exit condition - +DI falling below threshold
First Condition: Plus Directional Indicator (14)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 20

OR

Rule 3: Exit condition - Overbought with momentum divergence
First Condition: RSI
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 75

AND

First Condition: Plus Directional Indicator (14)
Timeframe: 1H
Operator: Less Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H

Stop Loss Orders (LONG)

Rule 1: Stop loss - Bearish momentum dominance
First Condition: Minus Directional Indicator (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Plus Directional Indicator (14)
Timeframe: 1H

AND

First Condition: Average Directional Index (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 20

OR

Rule 2: Stop loss - +DI collapse
First Condition: Plus Directional Indicator (14)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 15

OR

Rule 3: Stop loss - Volume confirms breakdown
First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Volume Weighted Moving Average
Timeframe: 1H

AND

First Condition: Plus Directional Indicator (14)
Timeframe: 1H
Operator: Less Than
Second Condition: Minus Directional Indicator (14)
Timeframe: 1H

🔴 SHORT STRATEGY (Secondary Use)

+DI is not naturally suited for SHORT strategies as it measures bullish momentum. Use SHORT entries only when +DI is very low, indicating weak bullish momentum, and combine with strong bearish confirmations.

Base Entry Order (SHORT) - Weak bullish momentum

Trigger Type: Once per bar close
Bar TF: 1H
First Condition: Plus Directional Indicator (14)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 15

AND

First Condition: Minus Directional Indicator (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 25

Additional Entry Orders (SHORT) - Not recommended

Additional entries not recommended for SHORT strategy using +DI. Use bearish indicators like:

• Minus Directional Indicator (14)

• RSI overbought

• MACD bearish crossover

Take Profit Orders (SHORT) - Exit existing positions

Rule 1: Exit condition - Bullish momentum returning
First Condition: Plus Directional Indicator (14)
Timeframe: 1H
Operator: Cross Above
Second Condition: Minus Directional Indicator (14)
Timeframe: 1H

OR

Rule 2: Exit condition - +DI rising above threshold
First Condition: Plus Directional Indicator (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 20

OR

Rule 3: Exit condition - Oversold bounce potential
First Condition: RSI
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 25

Stop Loss Orders (SHORT) - Protect existing positions

Rule 1: Stop loss - Strong bullish momentum confirmed
First Condition: Plus Directional Indicator (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Minus Directional Indicator (14)
Timeframe: 1H

AND

First Condition: Average Directional Index (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 25

OR

Rule 2: Stop loss - +DI breakout above resistance
First Condition: Plus Directional Indicator (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 30

OR

Rule 3: Stop loss - Volume confirms bullish momentum
First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Volume Weighted Moving Average
Timeframe: 1H

AND

First Condition: Plus Directional Indicator (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H

Advanced Strategy Combinations

Multi-Timeframe +DI Analysis

Setup

Higher Timeframe Confirmation:

• Daily: +DI > -DI (bullish bias established)

• 4H: +DI rising + ADX > 25 (strong bullish momentum)

• 1H: +DI execution signals + volume confirmation

Execution

LONG: Daily/4H +DI dominance + 1H +DI crossover above -DI Scaling: +DI rising with ADX expansion Exit: +DI falling below -DI or extreme overbought

+DI Momentum Breakout Strategy

Setup Process:

1. Identify +DI crossing above -DI (bullish momentum shift)

2. Confirm with ADX > 25 (strong trending conditions)

3. Wait for volume confirmation of breakout

4. Enter on pullback or momentum continuation

Execution:

• Base Order: +DI > -DI + ADX confirmation

• Additional: +DI rising above moving average

• Take Profit: +DI momentum divergence or extreme readings

• Stop Loss: +DI falls below -DI with trend strength

Risk Management Guidelines

Position Sizing

Strategy Type	Position Size	Conditions
LONG Strategy	Standard	+DI > -DI with ADX > 25
SHORT Strategy	Reduced (25-50%)	+DI very low, use bearish confirmations
High +DI	Increase confidence	+DI > 30 shows very strong bullish momentum
Low +DI	Reduce size	+DI < 15 indicates weak bullish momentum

+DI Reliability Factors

High Reliability

✅ +DI clearly above -DI ✅ +DI rising with ADX > 25 ✅ Volume confirms bullish momentum ✅ Multi-timeframe +DI alignment

Low Reliability

❌ +DI close to -DI (unclear dominance) ❌ +DI falling despite being above -DI ❌ Low ADX (ranging conditions) ❌ Conflicting momentum indicators

Best Practices

For LONG Strategies

1. Wait for +DI > -DI - Confirm bullish momentum dominance before entering

2. Rising +DI preferred - Enter when +DI is increasing (strengthening momentum)

3. ADX confirmation - Combine with ADX > 25 for trending conditions

4. Volume validation - Ensure bullish moves are supported by volume

For SHORT Strategies

1. Very low +DI only - Only consider SHORT when +DI < 15 (very weak bullish momentum)

2. Strong bearish confirmation - Require multiple bearish indicators for SHORT entries

3. Quick exits - Take profits fast when +DI shows any bullish recovery

4. 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 SHORT when +DI shows strong bullish momentum

• No ADX confirmation - Trading +DI signals without trend strength confirmation

• Volume neglect - Ignoring volume confirmation for +DI signals

Market Conditions Analysis

Market Type	LONG Strategy Effectiveness	SHORT Strategy Effectiveness
Strong Uptrend	🟢 High (+DI > -DI, rising)	🔴 Very Low (against momentum)
Weak Uptrend	🟡 Medium (+DI > -DI, flat)	🟡 Medium (if +DI very low)
Ranging	🟡 Medium (+DI/-DI oscillating)	🟡 Medium (mean reversion)
Downtrend	🔴 Low (+DI < -DI)	🟢 High (weak +DI confirms bears)
High Volatility	🟡 Medium (confirm with volume)	🟡 Medium (higher risk)

Related Indicators

Indicator	Relationship	Link
Minus Directional Indicator	Opposite bearish measurement	Minus Directional Indicator (14)
Average Directional Index	Trend strength confirmation	Average Directional Index (14)
Directional Index	Raw directional calculation	Directional Index (14)
ADXR	Smoothed trend strength	Average Directional Index Rating (14)

Conclusion

+DI is a bullish momentum indicator that excels at measuring the strength of upward price movement. Its primary value lies in confirming bullish trends and providing LONG entry signals when combined with proper confirmations.

Key Takeaways

• PRIMARY USE: LONG entries when +DI > -DI (bullish momentum dominance)

• SECONDARY USE: Bullish momentum confirmation and trend strength measurement

• ALWAYS: Compare +DI to -DI for directional bias and confirm with ADX

• REMEMBER: +DI measures bullish momentum - use bearish indicators for SHORT strategies

Success with +DI requires understanding its bullish nature and using it primarily for LONG strategies. Always compare +DI to -DI for directional bias and confirm with ADX for trend strength before entering positions.

Ready to Build Your Own Strategy?

Try our free AI-powered Strategy Builder at app.skyrexio.com and start creating professional trading strategies today. No coding required!