The DMI is used to identify a trending market and to provide an indication of the extent of this trend. It consists of 2 lines +DIp and -DIp. The 1st is a measure of uptrend and the second is a measure of downtrend. A 3rd line ADX (Average Directional Movement Index) indicates how much the market is trending, either up or down.  The higher the ADX line, the more the market is trending and the more suitable it becomes for a trend following system. Wilder's ADXR line rates the directional movement on a scale of 0-100. The more trending the market and the more suitable the instrument is for a trending system. When the ADXR line is below 25 it indicates a trading market which isn't suitable for a trend following system.

Directional Movement lines may be used as a system on their own or as a filter on a trend-following system. The crossing of the two lines generates buy and sell signals. Long when +DIp crosses over -DIp and short, when -DIp crosses over +DIp.