DMI (Dynamic Momentum Index)

[higler]

I have been looking at the NT version of the DMI indicator and can't figure it out. It doesn't appear to be at all similar to the DMI as referenced by the NT help at prophet.net. It also doesn't seem similar to any descriptions of the DMI that I have been able to Google. I can't figure out what the NT version of the DMI is showing. All descriptions that I read of the DMI is that it is quite similar to the RSI and should range in values from 0 - 100 with important lines at 30 and 100. The NT DMI on my computer seems to range in values from approx -1.0 to 1.0 and has no means of setting key values as it does in the RSI. What is the NT DMI showing me? Thanks.

[higler]

It looks to me like the NT version of DMI has gotten intertwined and mixed up with DM indicator type calculations and is not the correct DMI.

[NinjaTrader_Ben]

Hello,


Can you post a reference that you have found that shows a different display or calculation of the DMI? If so, I will check it to be sure it is correct.

There are slight variations in the industry so it is possible there are two ligitimate ways to display and/or calculate one type of indicator.

[higler]

Ben - As I indicated before, look at the NinjaTrader help under Dynamic Momentum Index and follow the NinjaTrader reference link to prophet.net. It describes, as all other references to DMI do, that it is similar to the RSI with key crossover values typically at 30 and 70. The DMI values should be in the range of 0 to 100. It is very similar to the RSI except that DMI should react a little quicker. Your own NinjaTrader help reference link shows that there is something wrong if you plot the NinjaTrader version of DMI on a chart.

The NinjaTrder version is not at all similar. It seems to be more of an oscillator around zero and results in positive and negative values. It does not even resemble the RSI. I recommend that you plot both the RSI and the NinjaTrader version of DMI on a chart. They do not resemble each other at all. If you look at the NinjaTrader DMI code, it looks like many of the calculations are similar to the DM indicator (which is not related to DMI). I haven't had the time to gather the correct DMI calculations off the internet nor have I had time to "back out" the calculations that NinjaTrader is doing from the NT DMI code, but if you do a little research, as I indicated, then I am sure that you will see that there is something very wrong with the Ninja DMI indicator.

Now, if you really want me to "back out" the calculations from the NT DMI inidicator code and then locate and compare the correct calculations for DMI to the NT calculations then I might as well write the correct DMI inidicator myself. I will have to bill you for that. (Just kidding, but I need the money anyway.) However, I do think that I've given you plenty of info above for Ninja to do the research and verify what I've said. Thanks.

[NinjaTrader_Ray]

We will check into this.

[tradetree]

It has been two years for NT to "look into this", what is the answer? Most graphing systems display a +DI and a -DI that cross over each other. For some reason these two lines together are seen as the DMI by some traders. There is also a "DMI" that is just a single line index from 0 to 100. Here is investopedia's description:

http://www.investopedia.com/terms/d/dmi.asp

I am interested in these:

http://www.investopedia.com/terms/n/negativedirectionalindicator.asp

http://www.investopedia.com/terms/p/positivedirectionalindicator.asp

[NinjaTrader_JoshP]

Both have been available in NT for awhile now.

If you want +DI and -DI use the indicator named DM. If you want the single DMI line use the indicator named DMI.

Our implementation of DMI is as outlined here: http://www.fmlabs.com/reference/default.htm?url=DX.htm

In any case, this thread was originally about Dynamic Momentum Index and not the one you are talking about which is Directional Movement Index. For Dynamic Momentum Index, please use the indicator named DMIndex.

[renkoben]

DMI NT indicator

The DMI range appears to go from +1 to -1

I cannot find a discription of this anywhere that seems to fit

can anyone else?

[NinjaTrader_JoshP]

Are you asking about Directional Movement Index or Dynamic Momentum Index?

[Chris_G]

DMI (Dynamic Momentum Index)

Hi all,

Can anyone please explain what this indicator is trying to achieve and how it works? The original indicator as designed by Tushar Chande and Stanley Kroll is an adaptation of the RSI based on volatility and ranges from 0 to 100.

As pointed out by higler at the beginning of this thread, the default indicator available in ninjatrader ranges from -1 to 1 and I also couldn't find any info on the internet on such indicator.

Thanks in advance for your support.

Chris

[NinjaTrader_PatrickH]

Hello Chris_G,

Thank you for your post.

The Dynamic Momentum Index is the DMIndex indicator in NinjaTrader. The DMI is the Directional Movement Index.

Please let me know if you have any questions.

[Chris_G]

Directional Movement Index

Hi Patrick,

Thanks for your reply.

Can you please explain the formula used by NinjaTrader to compute the DMI (Directional Movement Index)?

The original formula is ((+DI - -DI) / (+DI + -DI)) and due to the way +DI and -DI are built this ratio ranges from 0 to 1 (which is then normally multiplied by 100 and used as a percentage).

Chris

[NinjaTrader_PatrickH]

Hello Chris,

Thank you for your response.

The formula NinjaTrader uses can be found at the following link: http://www.investopedia.com/terms/d/dmi.asp

I have attached a version of the DMI that multiplies it's value by 100 to produce the effect you are looking for.

Please let me know if I may be of further assistance.

[Chris_G]

Hi Patrick,

If NinjaTrader wants to match the same formula as described in Investopedia (link you provided), you may want to double check the current formula as your indicator ranges from -1 to 1 whereas Investopedia (and any other source for what I know) clearly explains that the indicator is never negative (ranges from 0 to 1 or 0 to 100 if you make it a percentage).

See the issue is not that it's not multiplied by 100 but rather that you get negative values. I think what you have done is remove the absolute values and the if then conditions applied to +DI and -DI that make the indicator always positive. As long as you have a clear rationale for that, no problems. But if you are not able to explain why you may want to recheck.

I am using last version of NinjaTrader (8) so I couldn't import the indicator you attached.

Cheers,
Chris

[NinjaTrader_PatrickH]

Hello Chris,

Thank you for your update.

I will check with our Product Management team on this and I will update this thread if I have any details.