Minus Directional Indicator (MINUS_DI)

The Minus Directional Indicator (-DI) measures the strength of downward price movement. It's a core component of J. Welles Wilder's Directional Movement System and is used in combination with the Plus Directional Indicator (+DI) and Average Directional Index (ADX) to identify trend direction and strength.

Formula

-DI is calculated using the following steps: 1. Calculate -DM (Minus Directional Movement): Maximum of (Prior Low - Current Low, 0) 2. Calculate True Range (TR): Maximum of (High-Low, |High-Close|, |Low-Close|) 3. Smooth both -DM and TR over the period 4. -DI = (Smoothed -DM / Smoothed TR) * 100

Parameters

Parameter	Type	Required	Default	Description
high	Array	Yes	-	Array of high prices
low	Array	Yes	-	Array of low prices
close	Array	Yes	-	Array of close prices
period	Integer	No	14	Number of periods for smoothing

Returns

Returns an array of -DI values ranging from 0 to 100. Higher values indicate stronger downward movement.

Usage

require 'sqa/tai'

high =  [48.70, 48.72, 48.90, 48.87, 48.82, 49.05, 49.20, 49.35, 49.92, 50.19, 50.12, 50.10, 50.00, 49.75, 49.80]
low =   [47.79, 48.14, 48.39, 48.37, 48.24, 48.64, 48.94, 49.03, 49.50, 49.87, 49.20, 49.00, 48.90, 49.00, 49.10]
close = [48.20, 48.61, 48.75, 48.63, 48.74, 49.03, 49.07, 49.32, 49.91, 50.13, 49.53, 49.50, 49.25, 49.20, 49.45]

minus_di = SQA::TAI.minus_di(high, low, close, period: 14)

puts "Current -DI: #{minus_di.last.round(2)}"

Interpretation

-DI Value	Meaning
0-20	Weak downward movement
20-40	Moderate downward pressure
40-60	Strong downward movement
60-100	Very strong downward movement

Note: Array elements should be ordered from oldest to newest (chronological order)

Key Signals

-DI vs +DI Comparison: - -DI > +DI: Downtrend in control - bearish bias - -DI < +DI: Uptrend in control - bullish bias - Crossovers: Signal potential trend changes

Important: -DI shows directional strength, but use with ADX to confirm overall trend strength!

Example: Directional Movement Analysis

high, low, close = load_historical_ohlc('SPY')

plus_di = SQA::TAI.plus_di(high, low, close, period: 14)
minus_di = SQA::TAI.minus_di(high, low, close, period: 14)

current_plus = plus_di.last
current_minus = minus_di.last

if current_minus > current_plus
  spread = current_minus - current_plus
  puts "DOWNTREND IN CONTROL"
  puts "-DI: #{current_minus.round(2)}, +DI: #{current_plus.round(2)}"
  puts "Spread: #{spread.round(2)} points"

  if spread > 20
    puts "Strong downtrend dominance"
  elsif spread > 10
    puts "Moderate downtrend"
  else
    puts "Weak downtrend - watch for reversal"
  end
else
  puts "UPTREND IN CONTROL"
  puts "+DI: #{current_plus.round(2)}, -DI: #{current_minus.round(2)}"
end

Example: DI Crossover System

high, low, close = load_historical_ohlc('AAPL')

plus_di = SQA::TAI.plus_di(high, low, close, period: 14)
minus_di = SQA::TAI.minus_di(high, low, close, period: 14)

# Current values
current_plus = plus_di.last
current_minus = minus_di.last

# Previous values
prev_plus = plus_di[-2]
prev_minus = minus_di[-2]

# Detect crossovers
if current_minus > current_plus && prev_minus <= prev_plus
  puts "BEARISH CROSSOVER: -DI crossed above +DI"
  puts "-DI: #{current_minus.round(2)}, +DI: #{current_plus.round(2)}"
  puts "SELL SIGNAL - Downtrend starting"
elsif current_plus > current_minus && prev_plus <= prev_minus
  puts "BULLISH CROSSOVER: +DI crossed above -DI"
  puts "+DI: #{current_plus.round(2)}, -DI: #{current_minus.round(2)}"
  puts "BUY SIGNAL - Uptrend starting"
else
  puts "NO CROSSOVER"
  puts "Current: -DI: #{current_minus.round(2)}, +DI: #{current_plus.round(2)}"
end

Example: Complete Directional Movement System

high, low, close = load_historical_ohlc('MSFT')

adx = SQA::TAI.adx(high, low, close, period: 14)
plus_di = SQA::TAI.plus_di(high, low, close, period: 14)
minus_di = SQA::TAI.minus_di(high, low, close, period: 14)

current_adx = adx.last
current_plus = plus_di.last
current_minus = minus_di.last

# Wilder's Directional Movement System
puts "=== DIRECTIONAL MOVEMENT SYSTEM ==="
puts "ADX: #{current_adx.round(2)}"
puts "+DI: #{current_plus.round(2)}"
puts "-DI: #{current_minus.round(2)}"
puts ""

if current_adx > 25
  # Strong trend exists
  if current_minus > current_plus
    puts "STRONG DOWNTREND"
    puts "Strategy: Short or avoid long positions"
    puts "Confirmation: -DI (#{current_minus.round(2)}) > +DI (#{current_plus.round(2)})"
    puts "Trend Strength: ADX #{current_adx.round(2)}"
  else
    puts "STRONG UPTREND"
    puts "Strategy: Long positions favored"
    puts "Confirmation: +DI (#{current_plus.round(2)}) > -DI (#{current_minus.round(2)})"
    puts "Trend Strength: ADX #{current_adx.round(2)}"
  end
elsif current_adx > 20
  # Developing trend
  if current_minus > current_plus
    puts "DEVELOPING DOWNTREND"
    puts "Watch for ADX rise to confirm"
  else
    puts "DEVELOPING UPTREND"
    puts "Watch for ADX rise to confirm"
  end
else
  # Weak/no trend
  puts "WEAK TREND / RANGE-BOUND"
  puts "Avoid directional strategies"
  puts "DI values: -DI: #{current_minus.round(2)}, +DI: #{current_plus.round(2)}"
end

Example: -DI Trend Strength

high, low, close = load_historical_ohlc('TSLA')
minus_di = SQA::TAI.minus_di(high, low, close, period: 14)

current_di = minus_di.last
di_5_bars_ago = minus_di[-5]

change = current_di - di_5_bars_ago

puts "-DI Analysis:"
puts "Current: #{current_di.round(2)}"
puts "5 bars ago: #{di_5_bars_ago.round(2)}"
puts "Change: #{change > 0 ? '+' : ''}#{change.round(2)}"
puts ""

if current_di > 40
  if change > 5
    puts "STRONG & RISING downward pressure"
    puts "Downtrend accelerating"
  elsif change < -5
    puts "STRONG but WEAKENING downward pressure"
    puts "Potential trend reversal ahead"
  else
    puts "STRONG downward pressure (stable)"
  end
elsif current_di > 25
  puts "MODERATE downward pressure"
  puts change > 0 ? "Building momentum" : "Losing momentum"
else
  puts "WEAK downward pressure"
  puts "Limited downside strength"
end

Example: DI Extremes and Reversals

high, low, close = load_historical_ohlc('SPY')

plus_di = SQA::TAI.plus_di(high, low, close, period: 14)
minus_di = SQA::TAI.minus_di(high, low, close, period: 14)

# Look for extreme readings
recent_minus_di = minus_di.last(20)
max_minus_di = recent_minus_di.max
current_minus = minus_di.last
current_plus = plus_di.last

if current_minus > 60
  puts "EXTREME -DI READING: #{current_minus.round(2)}"
  puts "Very strong downtrend - watch for exhaustion"

  # Check if starting to decline from extreme
  if current_minus < max_minus_di - 5
    puts "WARNING: -DI falling from extreme high"
    puts "Possible downtrend exhaustion"
    puts "Consider reducing short exposure"
  end
elsif current_minus < 15 && current_plus > 30
  puts "VERY LOW -DI: #{current_minus.round(2)}"
  puts "Minimal downward pressure"
  puts "Strong uptrend likely (+DI: #{current_plus.round(2)})"
end

Example: -DI with Moving Average Filter

high, low, close = load_historical_ohlc('AAPL')

minus_di = SQA::TAI.minus_di(high, low, close, period: 14)
plus_di = SQA::TAI.plus_di(high, low, close, period: 14)
sma_50 = SQA::TAI.sma(close, period: 50)
sma_200 = SQA::TAI.sma(close, period: 200)

current_price = close.last
current_minus = minus_di.last
current_plus = plus_di.last

# Determine overall trend from moving averages
major_trend = sma_50.last > sma_200.last ? "UP" : "DOWN"

puts "Major Trend (MA): #{major_trend}"
puts "Price: #{current_price.round(2)}"
puts "-DI: #{current_minus.round(2)}, +DI: #{current_plus.round(2)}"
puts ""

if major_trend == "DOWN"
  # In downtrend - look for -DI confirmation
  if current_minus > current_plus
    puts "CONFIRMED DOWNTREND"
    puts "Both MA and DI show downtrend"
    puts "High-probability short setup"
  else
    puts "DIVERGENCE: MA shows down, but +DI > -DI"
    puts "Possible trend reversal developing"
    puts "Wait for confirmation"
  end
else
  # In uptrend
  if current_minus > current_plus
    puts "DIVERGENCE: MA shows up, but -DI > +DI"
    puts "Uptrend may be weakening"
    puts "Caution with new longs"
  else
    puts "CONFIRMED UPTREND"
    puts "Continue with trend-following strategy"
  end
end

Common Settings

Period	Use Case
7	Short-term, more sensitive to changes
14	Standard (Wilder's original recommendation)
21	Longer-term, smoother signals
28	Very long-term trend analysis

Trading Strategies

1. Basic DI Crossover

• Sell: -DI crosses above +DI
• Buy: +DI crosses above -DI
• Filter: Only trade when ADX > 20

2. DI Extreme Reversal

• Watch for -DI > 60 (extreme downtrend)
• Wait for -DI to start declining
• Buy when +DI crosses above falling -DI

3. DI Spread

• Measure spread between -DI and +DI
• Spread > 20: Very strong directional bias
• Spread < 5: Weak trend, avoid directional trades

4. DI with ADX Confirmation

• Strong Downtrend: -DI > +DI AND ADX > 25
• Developing Downtrend: -DI > +DI AND ADX rising
• Weakening Downtrend: -DI > +DI BUT ADX falling

Advanced Techniques

1. DI Divergence

• Price makes lower low, but -DI makes lower high
• Suggests weakening downtrend
• Early reversal signal

2. DI Clustering

• When -DI and +DI are very close (<5 points apart)
• Indicates consolidation/range-bound market
• Wait for clear separation before trading

3. DI Momentum

• Track rate of change in -DI
• Rising -DI = building downward momentum
• Falling -DI = weakening downward pressure

Related Indicators

• ADX - Average Directional Index (trend strength)
• PLUS_DI - Plus Directional Indicator (upward movement)
• ADXR - ADX Rating
• DX - Directional Movement Index

See Also

• Back to Indicators
• Momentum Indicators Overview
• Basic Usage