Description
Directional Movement Trend Following is a trend-following strategy based on NinjaTrader’s Directional Movement (DM) indicator.
The strategy combines two elements of directional movement analysis. First, it uses ADX to determine whether the market is showing sufficient trend strength. When ADX rises above the configured threshold, the market is considered suitable for trend-following signals.
The strategy then uses the relationship between the positive directional indicator (+DI) and negative directional indicator (-DI) to determine the direction of the trade. A crossover of +DI above -DI generates a bullish signal, while a crossover of -DI above +DI generates a bearish signal.
This combination helps the strategy focus on directional crossovers that occur while the market is already demonstrating meaningful trend strength.
NinjaTrader provides Directional Movement (DM) and Directional Movement Index (DMI) as separate indicators. Directional Movement Trend Following specifically uses NinjaTrader’s DM indicator, which includes the ADX, +DI, and -DI values used by the strategy.
The strategy also includes the standard FrostMist risk management, scheduling, and order management features.
