Negative Directional Indicator (-DI) is a technical indicator used in the analysis of financial markets to identify downtrends. It is a component of the Directional Movement Index (DMI), which is used to determine the strength and direction of a trend.The -DI is calculated by taking the difference between the lowest low and the previous low, and then dividing that value by the sum of the absolute difference between the current high and the previous close, and the absolute difference between the current low and the previous close. The resulting value is then smoothed using a moving average.The -DI is plotted on a separate chart along with the Positive Directional Indicator (+DI) and the Average Directional Index (ADX). Together, these three indicators can be used to identify the direction and strength of a trend.When the -DI is above the +DI, it suggests that the downtrend is stronger than the uptrend and that it is more likely that prices will continue to fall. Conversely, when the +DI is above the -DI, it suggests that the uptrend is stronger and that prices are likely to continue to rise.The -DI can be used in combination with other technical indicators, such as moving averages, to provide a more complete picture of the market and make more informed trading decisions. However, it's important to note that the -DI and other indicators should be used in conjunction with fundamental analysis, and not as a standalone indicator.
