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the directional movement index is an indicator that was developed by wells wilder in 1978 for commodities that helps reveal whether an instrument is trending it does so by identifying which direction the price of an asset is moving the dmi can signal both the strength and the direction of a trend as well as providing clues on buying and selling pressures the indicator consists of three lines a positive directional movement line d i plus a negative directional movement line d i minus and together they help a trader to gauge the direction of a trend the third component is called the average directional index or adx which helps investors get a sense of the strength of the trend the key levels to watch on the adx are 20 and 25. if the adx is below 20 itamp;#39;s likely that thereamp;#39;s a weak trend in the market prices might be trading sideways or consolidating meanwhile if the adx is above 25 this suggests thereamp;#39;s a strong trend in the market thatamp;#39;s when you should st