Definitions
In plain terms
It assigns each bar's directional expansion to the downward side only when that side wins strictly.
Technical
The rule uses current and prior highs and lows, finalized bars, identical adjustment basis, and explicit tie handling.
Scope
An equal outside move assigns zero to both sides under Wilder's strict-winner rule.
Formula
-DM_t = deltaL if deltaL > deltaH and deltaL > 0, else 0-DM_t=\begin{cases}\Delta L_t,&\Delta L_t>\Delta H_t\land\Delta L_t>0\\0,&otherwise\end{cases}| Symbol | Meaning | Unit |
|---|---|---|
deltaL | prior low minus current low | price |
deltaH | current high minus prior high | price |
Output unit: price
Examples
- A governed lesson calculates or identifies Negative Directional Movement only after its parameters, state, timing, and edge cases are declared.
Common misconceptions
- An equal outside move assigns zero to both sides under Wilder's strict-winner rule.
Concept relationships
Prerequisites
Required by
Where this concept is used
Evidence and governance
- TA-Lib Directional Movement Index Implementation TA-Lib · first party technical publication
Supports: preferred label, short definition, technical definition, formula
Limits: Zero-denominator and compatibility behavior can differ from the Fintech Builder package and must be stated explicitly.
- New Concepts in Technical Trading Systems J. Welles Wilder Jr. · first party methodology
Supports: historical attribution
Limits: The bibliographic page alone is not an executable specification; equality, seeds, and state transitions require pinned rules.
- Reviewed by
- fintech-builder-batch-007
- Last reviewed
- 2026-07-27
- Next review
- 2027-07-27
- Record status
- evidence reviewed
This record is evidence-reviewed and readable, but not yet promoted to published — it is served noindex,follow and excluded from the sitemap.